There are probably a lot of people for whom it is just a John Waters refereence, but there is a lot more history to it. This is (or at least used to be) a blue collar town and there are a number of lawn decorations that were popular in east coast blue collar neighborhoods dating back to the mid 20th century. For whatever reason, people in Baltimore seem to not give a fuck about trends moving forward and will almost aggressively hold on to things that go out of fashion (see Nike Air Force Ones). At some point we developed a self awareness about it and pink flamingos became a particular point of pride.

Here is a clip from an old documentary featuring local blowhard Dan Rodericks talking about how his mother refuses to give up her garden gnomes despite his condescending complaints about her poor taste.