Out of interest, are there actually people getting offended by England flags?
Since Euro '96, I don't think anyone's given a toss, really. Like Matt said, it's mostly SWP types who think there's some dangerous agenda behind them, but thank God immigrants have small workers' / students' revolutionary parties to protect them, that's all I can say. Oh, and because writing an "IT'S PC GONE MAD!" article is extremely easy to do, takes about 5 minutes, no research necessary.
Though I still have a fans' guide to the 2006 Cup, from when I went through checks at Gatwick, and alongside 'Hitler salutes', we were warned that we'd be bundled into a van if we attempted to hum the "Dambusters" theme tune. I dunno, it's political correc...etc