It’s a violation of the US Flag Code to make clothing or furnishings in the image of our nation’s flag. Disgraceful. .
This material was never a flag. It just resembles one.
Opportunistic rationalization. Or mechanical jurisprudence. I take it to mean either an actual flag or the likeness of a flag. For example:
Section 8(i)
“The flag should never be used for advertising purposes in any manner whatsoever. It should not be embroidered on articles such as cushions or handkerchiefs and the like, printed on paper napkins or boxes or anything that is designed for temporary use and discard.”
with your logic, how are we going to use an actual flag to print it on paper napkins.
Following the letter of the law and not the spirit of it.
Yep. You don’t even print the actual flag on a napkin and then wipe your mouth with it. Most proper use employs a design like bunting, Stars and Stripes but NOT the design of the National Ensign.
You’re correct about the spirit. It doesn’t have to be a blanket made from an actual flag. Something with the imprint of the flag that you wrap around like clothing, or drape on a bed or couch , is disrespecting the flag. But lots of uninformed people do it anyway. Even dumb politicians do it.
P.s. I’ll bet it’s made in China. Would they make me a fuzzy toilet seat cover made of their flag design? I’ll buy it. 
It’s not just flags. It’s less the fact that it’s flagrant disrespect and more that we all have to suffer w/ the kind of logic some people use. The world is worse because of it.