Being cheap has nothing to do with it. If a vintage set that is considered a collectors item, is advertised as complete, and a collector buys it, he can expect it to be complete. And even if the seller wasn't aware of it being incomplete, when pointed out a rare piece (the most rare piece in the set, in fact) is missing, he should get back to the buyer, and at the very least apologize.
What it looks like now, is the seller advertising it as complete and reasoning "I might as well not say the flag is missing, because this way I can get more money for it." which may not be the case, but by not responding he is making it seem that way.
And CVfan13, simply replacing it with a blue flag just doesn't cut it, and I would be very pissed off if I unexpectedly had to spend $10+shipping for a piece that should have been there in the first place.
Saying that $10 is cheap compared to other things in the world is also nonsense, a bag of jellybeans is cheap compared to a Lambourghini, a bycicle is cheap compared to a house, these are really things you can't compare, as Robin Hood also tried to point out, it's $10 for a piece of plastic the size of a penny, that is expensive, no matter how you compare it. You can get a new Lego set with 140 plastic pieces, most of them larger than the flag, for $10.
Between plotting to kill you all and chasing balls of yarn, I also build MOCs