If that is the worst insult imaginable, then all the more reason to let people do it, to EXPRESS themselves. It's called freedom of expression. And you know what? It is permitted to burn the US flag in the US. It is not permissible to burn the Indian flag in India.
It is about personal rights. Why should somebody be put in jail for burning a flag? Does burning a flag harm anybody or curtail anybody's rights? NO. Then it is not a crime.
A victimless crime is not a crime.
What exactly are you trying to express by flag burning?? Don't know about the US, but its a serious crime in most countries.
Since it is seen as an insult to national honour, punishment is justified.