Correction: people who have invested in the platform by way of steempower upvoted him. Not in any way all of them, but it should show all the good people out there that powering up instead of cashing put and helping oneanother can do a lot of good. Fyrstikken has many people who he hangs out with trading "shitcoins" and it is pretty obvious that he can get them to upvote him and get them to respond in his threads and support him in various ways. There is nothing keeping others from doing the same.
Indeed, just like with every truly free system, people are forced to act to protect good people in the moments they believe in the cause, or risk being overrun by corruption. Synereo will not fix this about humanity. Steem "fixing" it will not ultimately ever 100% happen.
And ultimately Flagging is not that big an issue for people who build/participate on steem based sites that have steem as a backend and different reputation systems/better solutions.
The system is so new it is hard to tell how people will use it, but ultimately our freedom comes with these risks. At least with dan, he gave people an incentive to stick around to work on problems as opposed to simply dumping everything they have at the first sight of difficulty (read opportunity for growth).