Expected payoffs don't have to equal any actual amount that can be won, though, so that's not the flaw in itself. The game could be that you get either half, or double, the amount you are already given based on a coin toss. Then, after 100 tries you could get double the amount 50 times, and half fifty times. The sum of this is then indeed 50*2x + 50*x/2 = 125x, so that each game you won an average of 1.25x.
It's not unlike the claim that each family has an average of 2.4 children (or whatever the figure is) -- obviously no family ever has that amount and you would lose every bet you made on a family having that many children, but the figure is still correct.