On the one hand, I find it incredible that there are "sides" to this thing in 2013. Still, there's some problematic treatment of the war on both sides (mostly, of course, on the neo-Confederate side). I've got a sort of running series of bullet points that structure my thinking on it.
1. There's nothing inherently good or bad about secession.
2. Secession outside of constitutional processes for breaking up the union is "illegal", but in a fairly trivial sense. The fact is, we pretty much make up morality and law. That doesn't mean it's random nor does it mean it's relativist. But in the case of secession at least it's pretty consequentialist and subjective. I classify the revolution, East Timor, and South Sudan as good secession. I classify New England in the early republic and the Confederacy as bad secession. But ultimately it's because of how I evaluate the projects that these parties were pursuing relative to the projects they were breaking up - not because "secession" has any kind of moral content.
3. The Deep South left because they wanted to preserve slavery, the Upper South left for more complicated reasons, including a naiveté about the prospect of war that lead to a real shock when war appeared on the horizon. This, as a Virginian, is a point I like to harp on.
4. Reasons for the war do not have to be symmetric. Neo-Confederates love to point out that Lincoln didn't start the war to free the slaves. I agree he didn't, but who cares? That's not proof that the Confederacy wasn't erected to preserve slavery from perceived threats. Even when slavery did loom large for Lincoln most of the North was still indifferent. Again who cares. In Jim Crow most of the North was terribly racist and segregated. Who cares. None of this absolves much less disproves the case against the South.
5. If you celebrate Confederate secession you are celebrating - bar none - the dumbest and most reprehensible collective decision making the American South has ever seen. Plenty seceded to preserve slavery, which seals this point sufficiently on its own. But for the sake of argument let's grant the neo-Confederate claim that it wasn't about slavery. Even if you think that, breaking up the union is still an awful decision and fighting a war to break up the union is that much worse. I don't care what Tom Woods says about nullification - this is not a move Washington, Jefferson, or Madison would have endorsed. And the fact that we don't have any in the pantheon south of Virginia for me to cite is telling: the Deep South has always been a liability. When they act like a liability they should not be lionized, they should be considered an embarrassment by anyone that proclaims pride in being from the South. And when other parts of the South follow suit they should be considered an embarrassment too. The unpatriotic nature of neo-Confederate perspectives isn't so much that they want to break off (they'd still be "American" if they did that). The unpatriotic nature of the movement is that it repudiates certainly the greatest accomplishment of a group of North Americans from 1607 to date, and probably the greatest accomplishments any group of Americans will ever be able to lay claim to. Why celebrate that?
6. And this is where I turn from disagreeing with the neo-Confederates to generating some friction with the other side - because while there's nothing to celebrate in Confederate secession there is plenty of substance to the idea of taking pride in the South. For better or worse, the Confederate flag has come to be a symbol of the South. What I don't think most non-Southerners understand is that most uses of the Confederate flag today genuinely aren't racist. Most aren't even neo-Confederate (although there's some of that obviously). If you haven't actually lived in the South I'm not convinced I can take your evaluation seriously on this (some that think this do have experience in the South, so I take that more seriously even though I may still disagree with them). So a lot of the neo-Confederate brouhaha is actually ginned up unnecessarily by a misinterpretation of exactly what it is that people are embracing. More often than not it's (1.) enthusiasm for Southern culture and (2.) balking at seriously obnoxious stereotyping and condescension from the rest of America.
7. And yet, I don't display the Confederate flag in any capacity and own only one item with the flag displayed on it. Why? Because even though I don't think most Southerners intend anything problematic by it, symbols mean different things to different people. I care less about non-Southern whites that get worked up by it, but I do care a lot about minorities that understandably interpret the symbol as a threat. If no one saw it as threatening there'd be no problem in having it around. But they obviously do, so what's the point of it? This is obviously context-dependent. I'm sure in some parts of the South minorities understand as well as I do that in most cases it's not meant to be threatening and therefore they don't feel threatened by it (granted, it's in those parts of the South that you're also going to find some of the people that do intend it to be threatening, so it gets complicated). In Northern Virginia that's a non-starter. Err on the side of not making your neighbors feel threatened is a good policy in my opinion!
8. In a similar vein, the Confederate flag is not the Nazi flag - it's more like the checkerboard on the Croatian flag. Leaving Hinduism aside for the moment, nobody uses the swastika today unless they have a view point on race and society consistent with Adolf Hitler. This is not the case for the Confederate flag. Lots of people use the Confederate flag today who - despite other things we might not like about them - don't even share views on race and society with Strom Thurmond much less Jefferson Davis. In this sense it's like the Croatian flag. This flag is very touchy for a lot of people in the former Yugoslavia who associate it with the fascist regime that allied with the Nazis. The flag pre-dates this regime and most Croats don't intend to be expressing a pro-Nazi stance. They just see it as a symbol of Croatia and they acknowledge that there are both dark and light parts to that history without embracing the dark parts. The trouble is - as I noted above with the Confederate flag - different people see that symbol in different ways. This is not the case with the Nazi flag. Pretty much everyone is on the same page as to what that means.
So in summation, if you display the Confederate flag I'm not one to pounce on you or call you a racist. I would suggest you think carefully about how and why you're using it. If you celebrate the Confederacy I think you're an idiot and an embarrassment. If you celebrate the South you're OK in my book. If you want to get into the intricacies of the legality of secession I really don't care - of course it can be legitimate, but that doesn't change my assessment of the Confederacy at all. My beef with the Confederacy was never a legalistic opposition to secession.