I don't want to think that it's that they don't give a fuck, that would just be tragic. They might as well completely hand the whole thing over to the community.
There's definitely something that can be done, I refuse to put too much thought into because at the end of the day I'm not the one sat on millions of dollars worth of Steem, Steemit Inc. are.
Unfortunately, I agree with you. It's not a pleasant situation, but I think new users should have to prove themselves before getting access to certain features like flagging like you say. I think you summed it up perfectly;
"This is a failure of the system to protect itself and not censorship if it were to protect itself."