One thing the 2DSC keeps in mind when reviewing appeals (remember, we do not as a committee do initial reviews!) is that flags and particularly sails are quite noticeable in-game. That's one reason why "the rules" might seem a little strict for some peoples' tastes -- we give everyone quite a large chunk of screen real estate to play with, and that has a high visual impact on the game.
Plus, once we approve User Content, for the most part it stays in the game permanently -- and honestly, it would be next to impossible to single out one design among the 30,000+ in the system. Avatar parts, however, can and do change. So do missions and other game elements. So again, in the long run we're better off maintaining a high standard and erring on the side of caution than at some point deciding, "Well, we allowed dreadlocks and porkpie hats until now, but since we revamped the avatars again they look really out of place. Better pull them from User Content, too."
(That's not to say we're planning any avatar revisions -- that's other devs' area of expertise.)
Lastly, keep in mind all of User Content is held to a high visual standard. Flags and sails are only part of it; there are community-built ships going into the game as well. These have an even greater visual impact on the game, and are held to a still higher standard.
We've gone the route of changing our mind and re-reviewing everything in the system before, as well. That was a couple years ago, before I was part of FLS's staff. The devs, as a whole, realised we had set the bar too low and the community was asking for -- nay, demanding -- better. So everything was re-evaluated in one fell swoop. That was painful for the community (as I'm sure it was for the devs dealing with the complaints at the time), and it's not a road we'd care to travel once more.
Right now, we have the
appeals process which provides a forum for you to request your flag or sail be reconsidered for the game if you feel it was rejected unfairly. If you have questions on this process you can post them
in this thread. Dealing with these issues on a case-by-case basis ultimately produces the best result, and over time will help improve our consistency on approvals. I'd love to be there helping inform others' decisions all the time, but that's a physical impossibility -- we're a global team and thousands of miles separate me from my colleagues

For now, the appeals process remains the next best thing to that ideal.