Karren,
It seems that Hon gets used when you want to show you care about the individual but don't know their name. Flo can't know every customer, but if she treats them like family, she gets bigger tips. Around here we all have some kind of name, so there shouldn't be a problem.
When I'm out and about I'd be happy with "Hon" over "Sir", "Buddy", "Mac", or "Hey You, Fella. Yeah, the guy in the skirt. No, the other guy, the one in the blue skirt." You know, that sort of thing.