The whole flagging issue is huge, and goes back to ebays feedback on some level. Honestly i have not seen a perfect system. But my own feelings are this. When somebody flags something, 4 random reviews should be made of that claim, Pay the reviewers some small amount of steem, and let the reviewers see who gets the strikes. How's that?
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There is no such thing as a perfect system, agreed! I think the ONlY solution is peer pressure from other whales.. but judging by the lack of whale comments id say that is a longnway off! Lets see what happens ;) we can only hope
In other words, if you flag something, 1 rep is coming off somebodies account, either the person flagging, or the person who was flagged. The reviewers decide.