I don't like people ignoring the 0.00 threshold like it doesn't exist. I'd think it's easier for most UI to have different behavior for content going below that threshold.
It could be argued that any amount of flagging is censorship but that complete censorship is impossible on Steem. I don't see any fundamental problem thinking some people might want to invest in Steem solely to be able to censor content they don't like/agree with.
Removing potential monetary rewards is not censorship. Removing the content is censorship, and the degree to which that happens is to be determined case by case. Since content is not removed at all from the blockchain, no matter what the rewards, as far as the blockchain is concerned there is no censorship. Hiding posts on steemit.com is arguably censorship because it is apparently removed, even though it is still accessible.