the south being tied to nazi, racism, hatred, etc has always bothered me. i always thought blacks and whites got along fine here. my family is mostly white, i had an Apache grandfather and an Italian grandmother (i know some whites joke that Italians are just barely white) but my moms still very white, blond and blue eye white. my native ancestors got along fine with everyone and my white family never thought different of blacks, and the Italians just sat around eating and watching Seria A football.
That's my experience as well. The most racially "advanced" states I have known are in the South. It's interesting to see the course history has taken in that regard. The states with the most overt racist history have more or less atoned for their sins and have a social situation in which black and white work together, live together, and come together during times of tragedy.
The North's brand of racism is more institutionalized and insidious. Sure, the rhetoric is grand, but northern cities are highly segregated compared with their southern counterparts. Black communities feel more alienated and slighted (because they are). So when an injustice (real or otherwise) is perceived, it turns into a powder keg. Mark my words- Baltimore isn't finished.
The South has its kinks. I think our country was better off with a Union victory, but the Southern character should not be stamped away and that battle flag is a part of their character.
It also serves to remind all Americans of national heroes worth emulating in their level of honor, skill, and love of country. Robert E. Lee, Stonewall Jackson, James Longstreet, Jubal Early, etc.