#1) Even though we see it all the time, according to the flag code, clothing representing the flag is wrong, and #2) The Supreme Court ruled in 1990 that burning of the flag is protected under the 1st Amendment. Agree with it or not, it's the law.
Facts Gregory Lee Johnson burned an American flag outside of the convention center where the 1984 Republican National Convention was being held in Dallas, Texas. Johnson burned the flag to protest the policies of President Ronald Reagan. He was arrested and charged with violating a Texas statute...
www.uscourts.gov