If I remember correctly it was just used as a symbol of equality, “all the colors of the rainbow.” Which is why it was so absurd when they tried to add the black and brown stripes. Uh, aren’t they already included in “all the colors of the rainbow?”

You’re probably partially right too, since the rainbow does figure into the Christian’s idea of renewal and deliverance. Back in the early 80s the gays and Christians didn’t like each other much, so it wouldn’t surprise me if part of the idea was to antagonize the Christians.