Expressing one's own nationalism does not necessarily mean "trying to turn everyone into nationalists."
I agree, although I was addressing your point that the presence of the flag itself represents an appeal to nationalism.
It's not a matter of questioning motives. We don't have to assume that they're doing anything ulterior to recognize that a national flag is a symbol that represents the nation. Making a national symbol like that an integral part of some sort of commemoration draws a symbolic link between the thing being commemorated and the nation.
I would guess that in this case, the symbolism was meant to express something like "9/11 was an attack on the nation, not just the ~3,000 people who died."
... which was the casus belli for the Afghan War and (sorta) the Iraq War.
... which points to why someone who opposed either war would take issue with the display.
Personally, the thing I find offensive is that each person who died isn't represented by something that's unique to them - their name or photo, for instance - but by a generic flag that's indistinguishable from and interchangeable with ~3,000 other flags. The display could be taken as disregarding the individuality of the people killed and instead representing them as anonymous units of "America" (even though nearly 400 of the 9/11 victims weren't even American).
You make some good points. However, I'm not sure how much the flag, in and of itself, plays a role in that. When we're talking about the Afghan War, the Iraq War, or the overall "War on Terror" that Bush declared shortly after 9/11, then we're not so much talking about the flag as much as it's about political rhetoric and the official statements made by our government.
I've noticed a lot of flag-wavers who love the flag and what they might consider "Americanism" or the American ideal, yet they simultaneously have a distinct anti-government bent, some even to the point of being accusatory and conspiratorial. Many have suggested that 9/11 might have been a setup by the government to rile up the masses into going to war.
But most people ostensibly believed the official story, and that being the case, they trusted the government's plan of action to bring about justice, which, as you point out, became the casus belli for the War on Terror, including wars in Afghanistan and Iraq. To me, that's typical US government geopolitical thinking, which isn't necessarily patriotism or nationalism. A lot of people have tried to make it such and associate the two, which is how concepts of patriotism became all the more surreal and vicarious.
But I didn't see any indication of that regarding this display. I don't mean to sound flippant, but this was more of a "Christmas decoration" than anything else. Some people get upset because they think it despoils the "true meaning of Christmas."