I see what you're saying, but let's not throw out the baby with the bathwater. It's a geography class. The entire curriculm in a geography class has to do with nations of the world. Seeing flags is an excellent way to get kids interested and asking questions; much more so than just having them read from a textbook.
Yes, there is a problem with leftwing teachers. But that doesn't mean that kids should be deprived of receiving the most complete education as possible. Let's look at the situation. I don't know which other flags were displayed, but right now let's take Mexico and China. Well, Mexico is a huge issue right now and a neighboring nation. China is a huge trading partner and the most populous nation in the world. Kids should learn as much as possible about countries like these because chances are they will in one way or another become even bigger issues in our nation's future.
As far as the Colorado legislature is concerned I really don't care. When it comes to the government beareaucrats and education I could care less what the lawmakers say. Let's not forget that the lawmakers there still allowed a true POS like Ward Churchill to teach, and get paid, at a State university after his blatant anti-American behavior. So, you can see why I really don't care what any government says about what can and cannot be taught to children.
Your last paragraph is where we really diverge.
I don't know if this was case, but if there was in fact a problem with marxist (or La Raza, or fill-in-the-blank) high school teachers (wearing their stupid Che Guevara t-shirts, as I might imagine) hanging certain foreign flags having nothing to do with the curriculum but everything to do with their personal politics, and the Colorado legislature felt it had to adopt a "bright-line" rule to deal with the problem, then it's too bad the law sweeps up apolitical geography teachers who enjoyed permanently hanging a large number and variety of flags, but I blame the left-wing teachers who caused the problem in the first place, and the apolitical geography teacher still does not have the right to simply disobey. The better course for him is, together with parents, to try to get the law refined, and if they are unsuccessful, that's too bad, and will have to use a poster of flags or a book or some other teaching tool. Individual teachers do not have the right to pick and choose laws they wish to follow, that is more of a liberal than a conservative philosophy.