Concerning the downvotes I think a committee of elected users with some delegated Steem power from Steemit, Inc. might help, which could decide (in case someone complains) if flags are justified or not, and if "yes" just counter them with upvotes.
In addition, accounts who repeatedly misuse flags in an abusive way (instead using them against spam, plagiarism etc.) could be flagged, as well, after a decision of that committee.
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