I think I do know the TRUE history. Perhaps you are the one who is misled, or in denial.
As to the flag, one of the issues of the Civil War (not the only one) was that of slavery. Like or not, the brand of slavery in the south was racist. Therefore the flag, as being representative of the southern culture BACK THEN was a de facto symbol of racism.
That being said, I do know there are other facets of southern culture, and the flag represents those as well. It would not be honest to say that it represents racism today because it flew over a "country" who had racist slavery as part of its culture. After all, the stars and stripes flew over the entire nation when the entire nation including the north had slaves. So to be quite honest, it (stars and bars) should no more represent racism than the stars and stripes since they both flew over slave owning governments.
I am not sure I like my own conclusions here, but it comes down to this: Symbols are meaningless. It is what is in peoples hearts. If it offends, live without it. On the other hand, realize that if it is indeed a thing of the past and represents other good and positive things, then they should live with it.