It will not be true censorship. People can build their own front-end to the STEEM blockchain and view the content that is there, regardless of flags. Also, SMTs will allow for Oracles who will determine who can and can not participate in the rewards pool for that token.

If they buy up a lot of STEEM, the value of all existing Steem Power holders accounts goes up. Bring it on. :)

I agree, worst peace is better than best war, but I also disagree that all downvotes are part of a "flag war". From a technical perspective, a downvote is the same thing is giving a slight upvote to every other post on the platform. Abuse happens often and flags/downvotes are needed to increase the real value created by real authors.