You bring some interesting points. I grew up in rural Illinois (where they pronounce that word as rrral) and the confederate flag was not uncommon there either. I've always felt that it was an icon or artifact of a particular mindset that "country is better" in some way.

After having lived in the south for almost 18 years, my perspective has changed. This flag, and most of those who continue to revere it, represents an image of the USA that doesn't exist, and never has. That image, IMO, is of a homogeneous country that is bible first, white protestant first, might-is-right, Molon Labe, Don't Tread on Me, etc. etc. Basically, the Tea Party, and you'll see that flag at Tea Party events in the south.

So to me, the flag represents not just an institutional racism, but the true division in our country between those who want it to be "the way it was" (but really never was) and those who see it any other way.

Personally, I don't mind seeing someone with the flag, because it makes it easy to identify people I'd prefer not to be around.