If one of the founders and creators of the system is doing that, it should tell you that your idea of what the feature means is incorrect. Indeed I would argue that calling it strictly and exclusively an "abuse flag" is too rigid. It is a flag, certainly, but whether it should only be used for abuse is simply opinion. Clearly @ned does not see it that way.
It can even be primarily an abuse flag and still be used for other purposes. That said, I agree with you that there should be a downvote option distinct from flag.
See where people walk -- and then put the walkway there. It's a flag. If we are supposed to think of it as a reward reduction make it look like one.
It also means that there is a total confusion and lack of consensus among the users about what this flag is supposed to be doing and when to use it. That's why I call it a UX disaster.
Some reputable authors clearly unhappy with their posts being flagged without a reason, while one of the founders indicates that it's OK to use the flag indiscriminately. Utter mess.
If the flag is used for other purposes, it loses its main functionality: a warning sign for the reader and a way to give feedback to the author. It essentially becomes a payment reduction tool with the unexpected side-effect of (sometimes) degrading someone's reputation.
OK, I'm not gonna raise this issue again - I don't want to abuse your or @dan's patience. I am glad you are one of the few people who understand the urgency of the problem. My mission to convey it ends here.