No, actually, thanks the oft-quoted First Amendment we are indeed allowed to do whatever we like with the American flag, or any likeness thereof. If you're in the military (or the Boy Scouts), then it's a big deal if you let the flag touch the ground and so forth. But if you're a private citizen, you're free to use it as a firestarter, toilet paper, or whatever else your twisted mind can think up. Whether or not wearing clothing with a flag motif is respectful is indeed a subject of some debate among people who care, in which group I am not included.
A quick Google search turned up this page, which might be informative.
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The what mentioned above is total fiction. Please don't take it seriously!