Also, within Islam the Quran is revered as the actual, unadulterated Word of God. If in Christianity, Jesus is the Word made flesh, Muslims consider the Quran to be the Word put into a book. It is usually covered when not in use and must always be placed on the highest shelf, etc.
It would beyond the flag as a symbol to a Muslim (not one myself so speculating here), as the flag has nothing to do with one's immortal soul. So I think that desecrating the Quran, to a Muslim, is about as blasphemous as you can get. Imagine if our country got invaded by a military, some of whose members then proceeded to desecrate Christian churches or Jewish synagogues "in the line of duty." Think about the reaction from the devout of those faiths. That's the image that is being projected by this. And given the amount of nutty conspiracy theories running around that part of the world, I'm afraid that this news may have confirmed some peoples' suspicions about us . . .