Thanks for the kind words.

I was wondering whether I should add issue #3.

Steemit relies heavily on incentives to function. Since upvoting is the only curator incentive, there will be a bias toward that behaviour. Punishment can only happen after posts or comments have been downvoted, but because of the bias toward upvoting, posts that should be downvoten aren't; in fact, the opposite happens.

I personally wouldn't call downvoting negative. Like upvoting it can be abused and be negative in context, but downvoting a very clearly plagarised content is in my opinion positive behaviour, and should be rewarded just as much as upvoting good content.

On a personal level, when I flag something, I want to see a positive result of that. bison015 is still commenting very quickly on posts and many Steemers are downvoting, but the user is still there, and still commenting immediately on posts. It's not completely black and white, and I'm glad to see the addition of a "Mute" button, but it seems odd that a person who's spoiling the party is still allowed to attend.

I understand your hesitance with rewarding downvoting. It could open up a whole other can of warms (think: a lot of posts with negative values). I still think there is value in it, but you're right to be cautious.