The Confederate battle flag has a bad reputation because starting in 1948, segregationists adopted it as their symbol. These weren't Klansmen meeting in the dead of night. These were elected officials who, in my opinion, were betraying their oaths of office when they defended the vile evil that was Jim Crow.
So why do so many white Southerners assume the flag is a benign symbol of regional pride? The Dukes of Hazzard, probably. When people see the flag these days, they think of gentle good ol' boys like Bo and Luke. They don't think of the pinched, mean faces of George Wallace and Lester Maddox, or martyrs like Medgar Evers who died for freedom and justice.