The Flood are alien parasites. Just look them up for a more detailed explanation.
A whole army of droids means nothing to infest and no combat forms for the Flood.Just give the battle droids some flamethrower attachments and let 'em go roast the little green curse-words.
And what would happen if the organic bits in Grievous got infected? Could the Flood get through his armor to the organic parts? If they did, imagine how hard it would be to kill a Flood infected Jedi Killer.
I also think some enterprising member of the CIS would try to imprison some of the Flood(if any of them ever got a chance to see the flood actually infest an organic) and unleash them on populated planets in an attempt to scare the other systems into submission. Then the plan fails because the Flood spread over the galaxy, leaving just the Droids and the Flood to populate the universe.
If I was totally sane, I wouldn't be as good at my job.