Wow, a zombie thread from 2011 resurrected from the dead. The advantage of a bike flag is visibility from all directions. I have several excellent 100 lumen USB rechargeable LED tail lights that were only $5 each and while they are more visible than the flag, they are a lot more directional. The field of view is much smaller. BTW, the one time I got hit by a distracted driver, I had both the flag and lights on my trike and was riding in a dedicated bike lane. I recently scavenged this flag from an old kite. I'll have to see how much drag it produces. It wouldn't stay upright with the flag holder that came with the trike but already made a DIY 2 point attachment flag holder that never loses a flag or drops down backwards in the wind.
The reason most online bike flags are so expensive is the shipping. It is very light but the dimensions are large. I looked at the Walmart site and they were quoting $20 for a Bell flag. I know the same store had the flag in stock at the store for around $6. I'd check there first before before buying one online.