Boy that was a long read, I agree with most of what you posted, I too know what I post on Steemit is not worth much but then again I don't get much so I guess that makes me even. What I really don't agree with is the flagging, I really have only been flagged twice by @asshole (perhaps you remember him) but he flagged everybody, and then by another guy who thought that me saying bid bots were not so great was a bad thing, neither of these downvotes actually hurt me, both were unnecessary. See if in real life you've got a job and they paid you by whether others thought it was good or bad, even if it was a great job you did, somebody would say it was lousy because we as humans are great at that. Same here, you don't like a post, you flag it, what did you gain? Why waste your time downvoting? You get no benefit except you think you are showing someone how morally upright you are, and that you are not afraid of expressing your true feelings, so really I don't see any profit in flagging. Of course I understand many people don't see this as I do, and they are free to do whatever they want to.
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Downvoting releases the downvoted rewards back to the pool, benefitting everybody.
Yeah, but you lose the amount you downvote for, which could have been given to someone you considered worthy of it (OK maybe very few are worthy, but you've gotta upvote some people some time). And with the way people are voting these days, I think that amount that is downvoted is actually lost, I'm not even sure if the complete reward pool is being awarded on a daily basis.