1. The lady, while a talented seamstress, is foolish to think something like this wouldn't happen. If she didn't, then her parents should have known.
2. People getting upset over the battle flag show their ignorance of history and what the "Stars and Bars" represents. I'd bet if she made a dress to match the Confederate States' flag, 9 out of 10 people would have no clue what it is; including the idiot of a principal.
This dress appears to be made to resemble the Confederate Battle Flag, not the Stars & Bars.
Here's a link that shows the difference.
http://www.usflag.org/confederate.stars.and.bars.html