Exactly right, they are risking missing a huge opportunity with so much discontent about Twit and FB now. Flags will lead to real bitterness as you say. I truly believe a reward based system that is not vulnerable to state interference is the future of social media, and someone else is going to come up with a rival system now the idea is out there.
As I'm a writer on controversial subjects there's not really much point my being here if all that will happen is I'll get flagged by some rich person objecting to what I have to say. Investigative journalism will not have a future here for the same reason. So it may just become another platform for awesome kitten videos and the like.
I am gathering info. as I go - examples of bad flagging and ideas for alternatives, and will put it together to make a case against the flagging system, feel free to share anything you come across if you want to. Problem is I'm not sure if they can change the underlying system now, I only have a sketchy idea of the technology so far.
I really think it has to go completely away. Any compromise is a compromise with evil. Steemit is an oligarchy because of the flag. It is the tool of oppression. I'd like to see steemit be the sunrise of liberty. The only way that will happen is to remove the flag. No thumbs down either. If they let freedom ring here membership will go through the roof with unprecedented optimism. They have an opportunity here like no other. I like how Daniel Webster put it. Steemit could be such a miracle.