Before the law against denial of crimes against humanity was passed in 1990, there were already laws against hate speech in place in France. Holocaust deniers were regularly found guilty of hate speech, but it generally required a lot of time to do so, because judges and prosecutors had to call a lot of people before the court to show that the deniers were lying (historians, witnesses, etc.). It took a disproportionate amount of time and money to eventually get to a conviction.

So the purpose of the 1990 law was to shorten a process that would anyway lead to a conviction.

Here's a translation of the testimony of a lawyer, Daniel Jacoby, who was initially against the 1990 law, but who finally endorsed it:

Firstly, to have in my family some camp survivors, and secondly to have discussed with children and grand-children of victims of genocides, I realized the extreme pain that the victims or their descendants felt when confronted with the denial of a genocide their parents, family, or relatives were victims of. Even talking about the genocide is extremely painful to them. Having to prove the systematic extermination of people from their community is unbearable to them. And when, before civil court, you have to prove yet again the existence of a real genocidal plan, telling everything again for the umpteenth time with statements from historians, testimonies from survivors, this is intolerable.

(quote translated from this source)

The existence of the Holocaust is a commonly admitted truth, like the Earth being spherical or orbiting around the Sun. The purpose of Holocaust denial is to inflict pain, and to rehabilitate antisemitism. It is not meant to debate or discuss history, but to further oppress victims of genocides. I'd suggest you to read the wikipedia article on the subject, in particular this section.

The French conception of freedom of speech regarding genocide denial is certainly different from the American one, but one can't say it is arbitrary or based on inconsistent principles.

Regarding the burning of the French flag, it's harder to make the same argument. I'd tend to agree with you, as to contrary to the Holocaust I don't think there are real victims in this case. I guess an argument to defend it would be that it's meant to keep national unity (I mention this argument, as it might be a convincing to you; to me it is not!).