I agree with the failure part, but the irritating issue is what drives many people away also.
You have to remember a large percentage of people give up on new endeavors quite easily. They are likely to quit, anyway, because they have little perseverance. Blaming flagging is in my opinion disingenuous.
Upvoting your post is genuine. Using bots to upvote a post to popularity, not so much. Flagging abuse is just one negative that turns many off... not the sole reason why people leave. That is left to overall frustration with the platform as a whole. It is NOT a social media platform as many expect it to be, nor was it ever intended to be. It was designed for bloggers and subsequently taken over by pirates! People are discovering other venues with better ROI's.
ROI, schmaROI. Who wants to make money when you can give your money away?! Steemit FTW! Gift economy is the future!