Thanks to Dan for upvoting my last post! It was morale uplifting for me! My biggest payout since i started posting at steemit. And of course, I saw the flagging wars at steemit which involves 
To a user like me, yes, it seems juicy to have such political squabbles and flag wars. Some steemians have stated that it is childish and trolls and such. But I don't really think so. In fact, i think it may even help retain users, especially the nosy ones. Just some reasons below IMO
Regular folks like gossips
People like you and me like to see juicy news and gossips. That is the reason why people google about celebrities, read about their dating history, their BG relationships and stuff. People are just nosy and want to poke about news like that. That's why we have paparazzi and such magazines can sell. Whether you agree or not, Dan and Ned are already some kind of celebrities in steemit as whales. In fact, they are the rare whales who are very open and at least we know how they look like. And of course, people can be very curious about them. This is what I call human nature. That's why people follow them wanting to know what is their latest post and news. All in all, political dramas and fights are potential news that can sell.
Not only that, Dan widely known as bytemaster at bitcointalk forum, is famous in the crypto community. I won't say popular but at least he may attract eyeballs. And for @Ned, yes he is hardly known in the crypto community before steemit. But, at least, he is a looker - handsome, charming and hey, nice hair. And not forgetting 
Steemit is kind of like people whispering and gossiping in this neighbourhood called steemit and also people who cannot agree and squabbles on the price of meat in the neighbourhood market.
When there is human, we have politics - that is sure.
On flagging
I am pretty sure anyone would get offended if they got a flag because it lowers their payouts. I mean who would be happy seeing their lower rewards. No one wants to see their money on the table being taken away forcefully and say that "No, you don't deserve this money."So i guess it is natural behavior to get offended but then everyone responds differently because we are all different individuals. That's the thing.
We have to remember steemit is a huge international community. We can never agree on something like 100%.
But to retain users and attract new users, I do think flagging is a BIG no! I mean why drive out users if u want people to use your coins and your dollars and stay in your economy. If they can't earn your economy coins and dollars, there is absolutely no way for them to promote your currency. Moreover, it leaves an ultra bitter feeling for them. So I would not support flagging as a steemit feature since it puts people off and potentially drives out users. Not in the best interests of steemit, i would say... Maybe a dislike button or expression buttons to stand for disapproval is better...
So what do steemians think?
Disclaimer: This is just my opinion as a bystander looking to attract new users and retain people in steemit. I don't endorse or support political acts and dramas at steemit. Even fake ones.
This view is coming from someone who studied International relations and is a Public Relations professional all her life.