Flag football is fine. Full contact carries too many risks of head injuries. I would discourage the kids in my life from playing it but others are free to do as they so choose. It should be required for teams to use the gold standard safety equipment. And co-ed teams should be an option.
It's a competitive sport that many kids love to play. It teaches them to follow rules and good sportsmanship. It gives them lots of exercise and toughens them up. It is also provides a good release of pent up stress in a relatively safe environment.
Some claim it's bad because kids can get hurt. Thing is, that describes just about any type of play.
Kids can get severely injured playing football by the tackles, or if one kids throws a temper tantrum and hurts another kid. I am only 13, but I do know that I hate it when i have to be scared to death for my brother when he plays peewee football.