After 21 yrs in the Marine Corps I learned a lot about flag etiquette. Now that I am a business owner I am shocked at the things people complain about. I buy a new flag at least 6 to 8 times a year. And the ones I buy are hurricane flags at $250 a pop. Oklahoma wind is hard on flags that are flown 24/7. I agree with you that they shouldn't be flying that flag. I can tell you that I get more complaints if I am NOT flying a flag then I ever do with one that is boderline unserviceable.
Semper Fi Brother. I'd appreciate if you and everyone else would call and complain. It just breaks my heart to see a flag like that.