Being in teh process or preparing an outline for a policy on these I have way to much info in my head, but not written down anywhere, to write a coherent reply, but here are some items to consider:
1) Is the property owner / developer proposing / using flag lots to avoid having to create a public road. ie It is not the best idea to allow the flag pole portion of the lots to be adjacent to one another, creates poor access conditions. (Page 13 of the report mentioned below has a great image of this)
2) Topography of the land. Does a flag lot allow for the development of the land in a manner that preserves a natural feature or avoids a natural feature that may cause problems in the future (steep slopes, wetlands, water courses). Use in these situations may be a good/ desirable thing.
3) What are the development standards like in your community? How do you regulate setbacks and separation distances with a lot that does not really have a front yard? The way we addressed this issue is to have a setback requirement from any other property line that is not defined in the By-law. You may want to look at doing something similar.
You may want to look at the National Cooperative Highway Research Program - Synthesis of Highway Practice 233 - Land Development Regulations that Promote Access Management. The author is Kristine Williams, AICP. It has some interesting comments and standards for flag lots.
Hope this is not too much of a ramble.