The city is simply trying to protect itself from a Equal Protection violation.
If they let the Marine put up an American flag without a permit, they could not stop a Mexican or Iranian put of a their nation’s flag.
florida law has specific statewide laws on this.
I have a friend who paid a fortune for a house right on the beach. A rich Wall Street trader bought the land next to my friend's house and built his own house. Apparently the trader was Italian and proud of it because he installed eight large flag polls around the house and flew Italian flags from each one of them. I thought about teasing my friend about it the last time I went to his beach house but my friend is so horrified that I don't think he'd take the teasing well.