Why would one wish to wear a flag with a hood? By all means drape a flag around your shoulders to display pride for your country at a sporting event (akin to wearing a scarf in your team colours).And we can and should fly flags to take pride in our country, as do other countries, but from buildings, flown alongside other flags. We should take pride in who we are, but sometimes, IMO, the England flag is displayed confrontationally.
From that picture, it does look a bit KKK-ish
I also don't particularly like the England flag being constantly displayed/flown on vans/trucks. It does seem to be a little unnecessarily confrontational. I imagine this item of "clothing" will be very popular with football fans, not necessarily with the rugby/cricket/cycling et al fans. Not sure, but let's see how it pans out. 
(PS - That does sound very judgemental, and I apologise if it does - just speaking from experience).