Here is one example of what flagging can lead to outside of steemit.
https://www.minds.com/newsfeed/681743255410319373
So for the decision to flag on rewards, it potentially can add up to a lot of negative PR for steemit, which can actually make it in the long run more damaging than even your math has indicated.
EDIT: That was one of @skeptic's / @mrcuntycat's post. Not affiliated with me I just knew he was another person very vocal about this issue recently, and definitely didn't approach it as reasonably as @krnel.
EDIT 2: My point... was not to bash bernie, my point was to show that the impact of the negative reaction to flag can have much farther reaching implications, so the up votes make a lot of sense. Though if you've been powering down for quite some time and buying bitcoin which has gone up, crashing steem due to your activities could make it easier to buy back in with several accounts or a really big one at a much better price. So the only RATIONAL reason I see to continue this in light of your math is for price fixing reasons.