You make a lot of good points. I think it would make sense to be able to rate on a scale instead of just upvoting. So instead of "flagging" you could vote 1-10, and if you voted 1, you'd be saying "no this content is actually not that good". It could be separate from flagging, which could be reserved for abuse issues.

There would be a lot of other advantages to this as well. I think I saw this posted somewhere on Steemit but I don't remember where.