The way he handled that is ludicrous. You don't damage another persons property because they're making a statement you don't like. What the store owner was doing was illegal in the first place, I'm quite certain theres a more sane approach to take. I'd start with informing the owner that it is indeed illegal to fly another countries flag above the US flag. I'd then contact the proper authorities if it werent taken down.
Fortunately for this bozo, the owner probably won't press charges. Simply because his business is already going to go down the pisser.
You know, while I might be a bit upset about a flag being improperly displayed, I cannot understand how the hell a law could still be on the books making it illegal to display an American flag underneath the flag of another country. I mean, that seriously smacks of the good old McCarthy days...
Lambaste me if you want, but I actually do have a problem with that.