Mr Justice McCloskey also warned that continued trouble is undermining the chances of any suspects being released on bail.
Limited police resources have been unreasonably stretched by the seven weeks of road blocks and violence, he added.
His assessment came as he refused bail to a man accused of inciting loyalist flag protestors to riot during the early days of the dispute.
Brian McLean was arrested during disorder in Carrickfergus, Co Antrim on 17 December.
The 31-year-old, of Maple Gardens in the town, faces charges of inciting others to use riotous behaviour, disorderly behaviour and failing to remove a suspected disguise.
His barrister said McLean accepted being at the scene drunk, but denied any involvement in the trouble.
The alleged mask was being worn around his neck to protect him from the cold, the court heard.
Defence counsel Desmond Fahy stressed that his client has spent six weeks in custody.
He argued that McLean could be released under tight supervisory conditions, including a curfew and electronic tagging.
But Mr Justice McCloskey identified a strain on the PSNI since demonstrations began in early December over the decision to restrict flying of the Union Flag at Belfast City Hall.
"It's a matter of public notoriety that limited police resources are being stretched beyond the boundary of what is viable and reasonable," he said.
"That, in the eyes of the court proceeding with its eyes wide open and feet firmly on the ground raises the spectre of difficulties in supervising and enforcing bail conditions."
So far more than 170 people have been arrested and over 120 charged with flag-related lawbreaking.
McLean's alleged offences occurred in the early days of what the judge described as "a protracted and shameful episode on the streets of Northern Ireland".
Pointing to an escalation in the disorder since then, he added:"The conduct is to the detriment of hundreds of thousands of members of the population of Northern Ireland."
He warned: "Those who prolong this conduct will have to understand that one of the consequences is that they are seriously prejudicing the prospects of anyone in custody being granted bail.
"Allowing suspects back onto the streets amid continue tensions would create a risk of further offences, Mr Justice McCloskey explained.
He confirmed: "I conclude that the prosecution objection to bail is sustained. I refuse the application."