Yes, you're describing the dreaded bad whale attack. Zuckerberg powers up a few dozen whale accounts and goes to town destroying everyone's reputations... Steemit dies. Right now the defense is for the good whales to catch the bad whales before they do too much damage, but that is a not a good long term solution.

I think my suggestion of validating flags/downvotes by upvotes might be a good way forward.