Should flat paint be used on bathroom wall?

You can, eggshell paint is a low-luster paint, meaning that the surface is less shiny, and therefore less hard than other higher gloss paints.

In an en-suite bathroom, or a powder room eggshell paint can be both esthetically pleasing and wipe-able. It will not, however be scrub-able, you need a higher gloss factor to be able to repeatedly wash (and sometimes scrub) a paint.

In a high traffic bathroom, one that sees multiple showers per day, or one that sees children (and their finger/hand prints) it is more advisable to use a higher gloss factor in the paint.

Many paint manufacturers make paints specifically designed for use in bathrooms and kitchens. They are higher gloss (pearl, satin, semi-gloss) and have a chemical in them which is designed to reduce mold and mildew.

Even in areas where humidity is not as big a factor as it is in some places, this added feature can be a good thing.