Because flagging also affects visibility it's clear that many users simply use flagging as a kind of "super downvote" which it presumably isn't meant to be. Their goal is to suppress interesting discussion of interesting things uncomfortable for their world view, not to clean up spam. I always read with showdead on because the sheer quantity of interesting, useful posts that get flagged is well beyond the value of the flagging mechanism.
HN seems to be stuck in a form of circular reasoning in which flags are taken as a sign that some people are (or claiming to be) upset, therefore the discussion won't be "good", so it is OK to suppress it, which then encourages people to flag things. But this just empowers aggressive minorities who weaponize their own feelings to shut down interesting debates for everyone else. It seems counter to the mission.
A simple fix: put the ability to flag behind a very high karma threshold, write out a clear policy for how it's meant to be used i.e. what is considered rule breaking and what isn't, then take away flagging privs for people who consistently flag things that don't meet the policy.