They're probably using ImageMagick to convert the PDF file into JPEG images. In my experience, the results aren't too bad as ImageMagick favors quality over performance (it is very sophisticated and can produce amazing results).
For the quickest possible result, you can go back to the company and ask them to use FlippingBook HTML component:
http://page-flip.com/It's a nice viewer (which I'm currently using whilst I further develop my custom-built one).
Alternatively, there is an open source solution which you can try as well:
http://flexpaper.devaldi.com/The lead developer is very friendly and ultra responsive (answered all my questions on his blog).
I don't think it's that big a deal to switch from jpeg to swf to be totally honest, so I'm not quite sure why your agency is making a fuss about it.