Thanks, Belle, and well done with the Belle of Amherst!
Yes, we see it all the time. But there are actually lots of people who care.
To be clear, there is a difference between clothing that includes red and white stripes and white stars on blue in such a way as to suggest or recall the American flag:
and actually using a flag as clothing or costume or wrapping oneself in a flag. The former isn't prohibited under the Flag Code; the latter is.
Whether it's tasteful can, of course, be whole 'nother matter.