I never liked flagging or downvotes on any platform and I never used it. I think it is always counter-productive and will just create a negative sprial of emotions and reactions. Steemit works by honoring content producers with upvotes to give value to their valuable post. There is no need to censor anything. Maybe there could be mechanisms to prevent someone from earning from stolen content, if reported in time. But so far I have only seen abusive use of the flagging option where ALWAYS one party felt like having the subjective duty to stop the other person. Usually both parties don't have the upper hand ethically. It is all heavily subjective. And on Steemit all that it takes is one wealthy person to ruin everything for another person. Who needs that?

Coming to your actual topic, the censoring or content: This is indeed very bad and must be prevented or Steemit will not thrive as it could and should do. All my reasons above are not considering this possibility of flagging abuse. One very good reason more to get rid of this negative function inducing further negative behaviour and actions.