Boxes of the shoe, a Fourth of July design, had already been shipped out when Kaepernick intervened, according to a report in the Wall Street Journal. Nike then asked retailers to return the sneakers, saying they feature an "old" version of the American flag.
"Nike has chosen not to release the Air Max 1 Quick Strike Fourth of July as it featured an old version of the American flag," Nike said in a statement. The company did not elaborate.
The image on the back of the shoes is the so-called Betsy Ross flag, which features 13 white stars in a circle representing the original colonies. Ross is credited with making the flag, though that has since been shown to be largely fictitious, according to the National Archives. Still, the design carries her name.
But the flag has been used by some extremist groups, including the American Nazi Party, and is seen by some as a symbol that celebrates times when slavery was legal.
The decision has ignited a firestorm, with some in favor and others accusing the company of hating America.
Texas Sen. Ted Cruz called Nike's decision to pull the sneakers unpatriotic, tweeting: "It’s a good thing @Nike only wants to sell sneakers to people who hate the American flag...."
Arizona Gov. Doug Ducey said he was pulling financial incentives for an upcoming Nike factory in Goodyear City.
"Instead of celebrating American history the week of our nation’s independence, Nike has apparently decided that Betsy Ross is unworthy, and has bowed to the current onslaught of political correctness and historical revisionism," Ducey wrote in part.
"It is a shameful retreat for the company. American businesses should be proud of our country’s history, not abandoning it," he added.
Fast Company's Jeff Beer praised the decision, saying it is reflection of the company's mission to be inclusive.
"Its decision here to listen to Kaepernick is an action consistent with those values it purports to believe in, something we’re constantly harping on brands and companies to be," Beer wrote. "Not taking into consideration Kaepernick’s point of view would have harmed Nike’s reputation much more than anything ... Ducey could do."
For his part, Kaepernick, who was the face of an advertising campaign for Nike following his controversial decision to kneel during football games in protest of police violence against black people, has not commented on the decision to pull the shoe.