It's a strange and delicate balance...
"Flags" are stupid because there's a 20-year web history associated with flagging being something used to report abusive, copied, spammed, plagiarized and spun content of dubious value. So when you flag someone, it immediately carries the connotation "your stuff is CRAP!" regardless of the underlying intent.
I think MUCH controversy and ill will could have been avoided, had "downvoting" been separate from "flagging."
Point 2: Active and effective peer curation is extremely important to the long time health and survival of a site such as Steemit. If we don't have an effective means of "sorting" (and rewarding) content by quality and perceived value added to the platform (and yes, I know those are subjective), this place can easily die an untimely death if a group of (typically "money for nothing seekers") came in and seriously tried to "game the system" for personal gain.
What do I mean? I have seen TOO MANY sites die from a flood of "This is my post, please upvote, comment and follow me, and I will do the same for you" posts have have ZERO purpose for even existing aside from to milk every possible cent from the rewards system. Of course, such an invasion causes all the real contributors to rebel and leave... usage drops to zero... end result, "goodbye and have a nice life." So we NEED curation tools...