I don't think what you saw was the confederate battle flag. Georgia incorporated the "stars and bars" as part of the state flag (made up about 2/3 of the overall flag design) from 1956 until 2001.

Matlock, like many shows and movies created in the 80's, captured society at that time. If people are offended, they should avoid watching Matlock. A lack of viewership is a sure-fire way to get replays of Matlock cancelled.