I actually agree with this use-case of downvoting. It's another way for high-value SP members to exercise their ability to curate and influence the site's content.
Since the whales have the most to lose if the quality on Steemit degrades to the point where people start losing interest and leaving, I think it's fair and that they have the right to make these kind of downvotes.
I've definitely seen a fair number of posts earning ridiculous amounts of rewards for the type of content they've added, but overall I think the quality of the trending page's posts has been getting better and that makes me optimistic that the Steemit is improving and on the right track.
i think it's also an honorable approach to take that if you DO downvote/flag anything, to include a comment as to WHY the choice was made - so as to provide feedback for the offending user. that may be a valuable gift that they straighten them self out with in the future.
That's a good point and not one I had considered. I'll definitely be doing this more, explaining why I downvote.