As only one of the many Steemians on the wrong side of this ‘Flagging war’, I think there’s a flaw in the way flagging works.
I keep saying this, “I’m still learning” – BUT Steemit is a society and because it’s new, it has a few wrinkles that could use a bit of an ironing (steem iron if you like).
I like what @williambanks suggested, that you lose significant amounts of SP for flagging, but if that SP and the lost rep point were held in escrow until someone could take a look at the flag and either dismiss or uphold it, returning both if the decision to flag is valid, would that work?

As for bullies – and that’s exactly what this guy seems to be (not going to name him, I think he revels in being named). Bullies can have their power taken away by ignoring them but that’s something that has to be done by everyone, not just one person standing alone. The serial flagger (I dubbed she/he/it ‘shit’ in my blog about it) is pissed about something; but as a spoiled, petulant child will, he’s not tried to sort out the source of the problem and deal with it in an adult manner, he’s gone on a teddy-throwing rampage. When that appears not to have worked, he’s dragged in innocent Steemians that have no clue as to why their blog was flagged (me for example).
It doesn’t seem to matter that it’s costing him his own bitcoin to power up, again, the act of a petulant, entitled brat, and he’s determined that if he’s not allowed to win this ‘game’, then he’ll either take his ball and go home, or destroy the game altogether.

That is not the type of bully you can just ignore. That type of bully is not happy until everyone is as miserable as he is.

Perhaps the way to stop this particular one is to make flagging impossible at a certain level of reputation?

Either way, I don’t bow to bullies.

More SteemPower to your elbow @tuck-fheman! I hope this gets sorted before it spoils what seems to be a good thing and people start leaving.