This is not harmful. It happens all day every day on reddit. People vote what they like or think is good/interesting, downvote what they don't like or think is worthless/stupid. In the case of steem not only do the most popular comments get visibilty (as on reddit) but they get a bit of rewards too. That's all fine.
What is harmful is when more and more stakeholders opt out from voting on merit (whatever you think is merit is fine) and use their vote power for personal gain, because the incentives support doing that. The incentives need to change.
The tagline for STEEM development right now should be "fix the incentives." I also like "find ways to discourage content-agnostic behavior."
Lets see.
When someone is downvoted on Reddit, their earnings arent erased.
Correct. And when they are upvoted on reddit, they don't earn anything. Don't expect to play "Heads I win, tails you lose", at least not if you want Steem to continue to function.