Taking down the flag with the express purpose of replacing it with another sovereign flag is an act of aggression and possibly treason. While not directly violent, it does announce intent.
Americans probably do hold the flag dearer than an Aussie. Our flag is soaked in the blood of patriots that fought for a free nation (and before you take your jabs about America not living up to its standards - I agree, but we are getting there). Australia did not fight for its independence, so perhaps doesn't hold the flag in the same regard?
Students have every right to protest; every citizen does. However, once you start damaging property, taking over buildings, and generally disrupting operations of a place you lose that right. Your right to protest does not give you the right to commit crimes.
Yeah, we did used to burn British flags. As mentioned above, we were at war then.
And as an aside, for someone who goes on a lot about how bad nationalism is, you spend a LOT of time comparing everything to how things are so much better is Australia. Sounds very nationalistic to me.