The Confederate flag was the flag of a nation that rebelled against the US - because of that, many people think it's 'treasonous' (even though the Confederates considered themselves the true patriots and the war the 2nd American revolution, and they had some solid arguments on their side).
It was also a flag of a nation that actively defended slavery - because of that, another group of people consider it offensive (even though most nations that have existed more than 100 years were at one time active defenders/practitioners of slavery).
And it was a flag of a nation that lost its war of independance - because of that, another group of people latch onto it as a symbol of their heritage, ie, the noble struggle for independance their ancestors fought, which separates them from the yankee culture that they don't like very much (even though they lost and haven't done more than talk trash since).
Those are the factors that actually have something to do with the war and the actual meaning of the flag. But, there are two more twists hidden in there.
The Confederate battle flag was adopted as a standard of the KKK - because of that, many people consider it flat-out racist and equate it to the Nazi flag (even though the KKK always carried the American flag right next to the Confederate flag).
And, when Hollywood started glorifying the good ol' boy culture and the rebel youth culture, it basically used the Confederate flag as a symbol of all rebellion against authority and the true spirit of independance - because of this a lot of people see the confederate flag as having nothing to do with race or the civil war, but as a symbol of freedom itself.
So that's why the issue is so massively divisive. Pretty much every standpoint is at least a little bit understandable even though none of them have a very solid, objective basis.
Undoubtedly in the situation you describe, the teacher saw the belt-buckles as anti-gay because of the KKK connection, and this in turn undoubtedly outraged many people who see the flag as a symbol of freedom or heritage, and reject the KKK's use of it, which resulted in the teacher being suspended.
At the end of the day, it's a piece of cloth (or just a picture of a piece of cloth), and there is no person or group that can legitimately claim to know the only true meaning of the flag. If it ever offends you, remember how many people still see it as a truly positive symbol and take the time to find out who you're dealing with and how they see it before starting a fight over it.
The simple fact is every symbol is subjective, and making enemies because you refuse to consider that something might mean something very different to someone else is just pointless. Life's too short.