Flagging without "removing rewards" is useless, because spammers still get rewards.
it will result in larger Steemit community and more money for everyone,
Reward pool is limited to ~50,000 STEEM per day, so If spammer get more, other users get less.
But if spammer is already flagged, then it makes almost no difference, less people would upvote his/her posts. Maybe some workaround can be made, for example a limit on rewards for spammers.. Just saying man, anything would be better than how it is right now, people are getting downvoted for unexplainable reasons and money from those posts is reducing even if it's a good quality post. There are some bots that downvote posts with bought votes. People have right to buy votes, so what, if it's a good quality post it is OK, it deserves attention, and this way we can earn money (I guess this is mining) and we have all rights to do so.