i don't know all the chemistry of it, (any chem major feel free to jump in and correct me!) but basicly, saturated fats (particularly) and all solid fats to some degree, have a crystiline structure.
it is the crystiline structure of the hydro cabons that allow fats and flour to mix and combine, and end up being very different--just as pure carbon can be in slippy sheets, or solid lumps, or hard diamonds..

these crystals, combined with the protein in flour (gluten), and just a very little water, form smooth sheets (the same way carbon does can alone, when it forms slippy sheets of graphite, which even feel greasy!)

the gluten in flour, when mixed (agitated)in with water, (and very little shortning-- almost the opposite ratio from 'pastry', forms a mesh--the yeast (or rather the CO2 it gives off) stretches this mesh to create bread as we know and love it.

If you agitate it just a little, and add a fast acting leaven (like baking soda and an acid --as in Faldage's recipe) you get a very soft mesh (or as he would say, tender pancakes!)

But when you mix flour with shortning and a medium amount of liquid, you get a different structure again, a hard crystal (or crisp cookies!)which aren't flaky!

i think we touched on why shortening was called shortening, long long ago, in a thread about grease--which american some times think of as food stuff, (and in the UK grease they never do!)

partly it is the very naturechemical structure of the fat/shortening (and oil will do it to some degree, but less so), which is why the best pie crust are made from lard (you can almost see the crystals in lard, it glitters!) and the least flaky come from crusts made with poly unsaturated oil.