This was a case of the US Flag, and where it can be displayed. I agree that an establishment should be able to decide what its policy is, and that consumers should be free to take their business elsewhere if they disagree with that policy.
What I saw was a lot of like-minded people who were doing two things, spreading the story to let others know of the situation, and deciding not to patronize the establishment due to the policy.
Another Freeper made the statement that if they allow the American flag as a "banner", then they have to allow banners for groups having banquets like Islamic terrorist banquet, the Gay and lesbian banquet, the Atheist banquet, the Communist Party banquet and so on.
I believe that one can and should be able to display the flag of the United States in any environment in this country without having to allow banners celebrating people who want to put reproductive body parts into body parts used for excretion or banners for people who believe that killing innocents in the name of their God is a primary virtue.
I believe that the flag of The United States of America has a completely unique and different meaning than any other banner, and as such, should not be treated in the same fashion as a birthday banner. I served under that flag, and my dad was buried under that flag. 
As I wrote in my email to Olive Garden, "When the American flag is deemed to be a distraction to diners, it is time to stop dining in a place that considers it a distraction."
As I said, I also agree that customers should be able to patronize any establishment they wish, and if I were running a restaurant, and an American flag on the wall distressed any of my customers enough to cause them to complain, I would return their money to them and ask them to leave. I will never patronize an establishment whose management feels the need to cater to people who are offended by the sight of the American flag.
I did get the following email boilerplate response from them:
Dear Robert:
We are very sorry for any misunderstanding about this issue. We do not have a policy at Olive Garden concerning bringing the American flag into our restaurants. Some members of our team were misinformed about company policy by our corporate office. As a company we take responsibility for that and we regret it. We take pride in how we communicate to our restaurants and we are correcting this so it doesn’t happen again. Like all Americans we have nothing but the utmost respect and admiration for the American flag and everything it symbolizes. In fact, we periodically provide American flag collar pins to our employees to wear while serving guests. We welcome anyone who wishes to bring the flag into our restaurants.
Sincerely,
John Caron
President, Olive Garden
Fine. I will be unlikely to eat there, simply because I don't care for their food, and I think people are free to do to same.
But I also feel that people should be able to express themselves in whatever way they wish without being branded as being politically correct. It IS still America, for the time being.