The post-war resurgence and use of the civil war redneck flag started in the 50's as a way of saying "my state is for segregation." Any post-war use of the flag is inherently racist because of this cultural connection.
Even if an individual waves/owns/displays a rebel flag for "historical" reasons it's still strange because regardless of the way they feel about it they're still waving an enemy flag.
I don't think the flag should be removed from fiction like games etc, but I don't think it has any real legitimate place in contemporary America.