I think having some pride in your country - where you live, work, play etc. is ok. To me it's not a binary thing where you're choosing a side based on the totality of all past events good and bad. Not the same as Nationalism, or pushing one majority agenda for the country above all others.
Someone mentioned the critique of being proud of something you didn't do (the George Carlin piece). I disagree. I think you can be proud of others, perhaps even a country, because of your associations with them. I'm proud of things my grandparents and parents have achieved in their lives. I'm proud of what my kids do (most of the time).
It doesn't mean that you ignore or forget all the bad things they might have done or poor choices they made. In fact, one could argue that if you can't be proud of things you didn't do, you also can't be ashamed of things you didn't do either. But I think it's more complicated than that.
I think a lot of our conflict about celebrating Australia Day comes from the feeling that we haven't acknowledged the bad side of our past as a country. That it's ignored or glossed over.
I'm not sure what this acknowledgement needs to look like, but I hope we get there one day.