Personally, I saw the Huntsville motel/flag issue as positive because it prompted people to express their respect for the CBF and the men who fought and died under its folds.
You said, "It is only respect for the laws that keeps us together as a multi-cultural country." I disagree. It is not only respect for the law, but tolerance of the other guy's point of view that makes this society work. If the guy who decided to use the CBF to protest the results of an election had any respect for the feelings of those for whom the CBF transcends petty "flavor-of-the-month" political considerations, he wouldn't find himself in the hot-seat now. Of course, he probably wouldn't have his 15 minutes of fame, either.
Lest I be misunderstood here, let me emphasize that tolerance does not mean acceptance or approval. The people who expressed their opinions about the CBF issue have not issued demands that he remove the flag or made threats upon his life -- they tolerate his display of the flag -- but they have expressed their disapproval. I see nothing at all wrong with that.