This is a myth perpetuated by the flag manufacturers to sell more flags. Why would you need to burn your flag because it got dirt on it? That's what washing machines are for.
And this is while most people who say the flag can't touch the ground ignore the other rules in the flag code (that doesn't apply to civilians) that state that the flag should not be flown on the same pole as another flag, and in the event that it is flown alongside another flag on a separate pole, both flags should be flown at the same height.