(There's a pretty complete description of the association between the red flag and revolution on Wikipedia's page on the color red)
It can be associated with revolution (at least as far back as the French revolution, before that in Europe it was sometimes associated with monarchy) and communists see themselves as revolutionaries.
Red is associated with courage, sacrifice, blood and war in general.
In the West, a red flag in battle was used to signal the fight would be to the death and there would be no surrender (and/or no prisoners taken). Communists may have adaptedadopted it to send that message to the nobles/upper-classes. Or maybe it was just for the general association with courage/sacrifice/war.
In Asia, and China in particular, red is associated with loyalty (to the C.P.?), honor, success, and happiness. As such it's a nice flag for the Communist Party to use.
I don't think there's a definitive logical answer to the question. The answer is probably some combination of the above. Also communismcommunists world-wide would have copied each others color, to symbolize unity/shared ideology and the historical association with revolution.