The tradition began with Bruce Jenner celebrating his world record-setting performance in the 1976 decathlon, kind of.
George Foreman waved a small American flag, barely larger than his hand, after he won the gold medal at the 1968 Olympics. Then, Jenner waved his, and the trend continued in 1980, when U.S. hockey goalie Jim Craig draped himself in a flag after the “Miracle on Ice” run. By 1984, displaying flags amid “U-S-A! U-S-A!” chants had become tradition after medal-winning performances and have become almost mandatory since. And, rather than the little flags Foreman and Jenner waved, there are now full-scale flags being carried by victorious Olympians.
I like spontaneous displays of patriotism (as in the cases above), but it just seems pointless when it becomes a manufactured adn de facto way to celebrate.