I fully agree that it is desirable that these flags are properly preserved. However, the tradition of "laid up" colours has some powerful precedence.
Queens Regulations (which also still govern the Canadian Army) stipulate that colours are to be laid up "in a church or other public building", and then go on to note that no public funds are be spent on them once the colours have been laid up. But since the phrase "public building" can include the regimental museum some colours are fortunately being laid up there as well.
I suspect the colours being allowed to waste away in churches are mostly from the First World War. In 1914 the Minister of Militia and Defence used the existing militia structure to create brand new battalions for service in Europe. These battalions very often had only a tenuous connection with established regiments. Subsequently, many of these battalions were broken up to provide replacement troops for already existing battalions. Thus a large number of battalions had only a brief existence before they became orphaned. Sent to established battalions, their men found a new battalion identity, and the memory of their first posting was forgotten. The battalion flags, laid up with the demise of their parent unit, were also left to be forgotten.
Ryan