1. Yes you are. Unless you have a restraining order or something against you, you can most certainly keep flirting with a person. You'll look like a complete idiot, but you can.
Let me re-phrase, yes you can do almost anything. It is a free country. He's not going to jail over this. He was just made to look like an idiot.
Yeah, he was, and as such, it's fair that a lot of people now consider him an idiot (or worse, depending on their inclination).
It is all quite scary though. Granted, this dude is a public figure in many ways, but what if this was some rank and file game developer who nobody knew? He gets drunk, acts like an ass to a female acquaintance, she publicizes (though this is not what happened here presumably) the conversation, and suddenly he's made headlines on Kotaku and NeoGAF if they're having a slow day? He likely loses his job as his employer caves to the pressure, and afterwards whenever someone types his name into Google, this is what they get as the first result.
Like I said, scary as hell. That's close to the stigma you get from a criminal record, all for a few minutes of being a dumbass in a completely harmless manner, which I'm sure we're all guilty of in some capacity. There's also the case of that low-level Microsoft exec who was rude to people on twitter, ended with him being fired, having to move, and receiving death threats.
Seriously, it's like we're going back to the middle ages in terms of herd mentality and witch hunts. Except this time, instead of your village hating you, it's thousands of people all around the world whom you've never met, and have no way to influence.