"they weren't surveilling Flynn, they were surveilling the Russians?"
Obama would not need to bug him directly if some other group could be the target. This did indeed happen with Flynn while at Trump Tower talking to the Russian ambassador on the phone.
P.S. - Do you really think that if Flynn were trying to collude with the Russians that he (or they since they are experts at espionage) would be carrying on conversations with direct calls to the embassy and the ambassador? Don't you think that if the Russians were really trying to manipulate that the meeting would have been untraceable and that we never would even have heard about it?
Flynn seemed to be using the "front door" a lot for communication - not very typical for an intelligent person trying to hide something.