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It is ironic because it is completely contrary to the actual facts. Summit, of course, means the top of something like a hill or mountain. But the narrator tells us that the town is down there, flat as a flannelcake.
The reason for this, I think, is that the narrator is trying to set up the idea that he and his partner are smart and the people around the town are stupid. The two of them think that they are going to come in and easily get rich off the hicks in the town. Having the town have this silly name helps give this feeling that the narrator is superior to them. That won't last...
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