The base flashing looks fine. They are called 'baby shingles' in the roofing vernacular.
In 30 years of roofing that is the first time I ever heard of "baby shingles" ?
No the base flashing "which it is called step flashing on the east coast" from that picture doe's not look fine.
The 1x4 is not a "counter flashing". The siding may very well terminate close to the roof covering and over the step flashing and the 1x4 trim board was placed over it. We can't tell from that picture. The shingles could be a over lay or when the old shingles where removed they just went right over the flashings instead of between each piece of flashing.
It is also possible that the bottom edge of the siding had some water damage so they put the 1x4 over it to cover it.
If you have more pictures please post, further away would be best.