I have traveled to Europe several times with a Canadian flag on my bag, and have only had positive responses, aside from a few American travelers who actually seemed offended that I had a flag on my bag. To me I never had to even think of it, growing up in Vancouver if you backpacked anywhere it was almost assumed you would have a flag. When I did my first trip almost 4 years ago, I didn't even have to think about it, I just put my flag on my bag. I wonder why this has become an issue for some. Some Americans have said quite rude and bluntly - why do you need to let everyone know your from Canada? Simply put, I love being Canadian! That and I almost feel like its a tradition, like I said I never thought twice about it, I just did it. The flag has only ever helped me, for example I was lost on the Moscow subway, and a very nice man from Budapest approached me and said he had family that lived in Canada and helped me find my way through the subway.
While I did just buy a new Canada patch for my bag for my trip this summer, I love the idea of the BC patch. I think you are right on when you say it will be a conversation stater, I think its a great idea, heck I may even steal it! So my vote is for the BC patch, maybe I will ever see you on your travels! Good luck