Well, in a sense. I think the WC bases its image on the Olympics, which is pretty much about nationalism at the elite level. But also it used to be an amateur sport, and state funding was pretty essential for athletics to function at international level.
But thinking about this now, and looking at the IAAF website with its endorsement of great philanthropic bodies such as a Chinese oil and gas giant, coupled with countries such as Qatar being allowed to 'buy' themselves champions from elsewhere, the whole thing's pretty much a joke. Maybe in the same way that in cycling Team Sky are a British team but not the GB team, and in F1 Lotus are British and Lewis Hamiltion is British but neither represents GB as such, athletics needs to move on and have Team Nike, Team Coco Cola, Team Amazon. After all, many elite athletes train away from their home country in centres sponsored by people like Nike. I'm not sure how it would translate for the Olympics, but just as Steve Ovett was behind the times in his rant against athletes being paid, so maybe Rutherford and others are old school in terms of the importance that they attach to the Union Flag and national representation.