That's a good question and it looks like a flag is considered in ranking before it goes defunct. From the faq [0]: How are stories ranked? ...upvotes [positiv

That's a good question and it looks like a flag is considered in ranking before it goes defunct. From the faq [0]: How are stories ranked? ...upvotes [positive]...time [negative]... Other factors affecting rank include user flags, anti-abuse software, software which demotes overheated discussions, account or site weighting, and moderator action. So for all intents and purposes it looks like a flag acts in some way as a downvote. I was just confused by the term "downvote". They don't have the same effect as an upvote (maybe more effect?) but they do drop a story in the rankings even though they may not be removed. Those last three factors look like it can be rather arbitrary. But in general I prefer the quality of articles and discussions here to other sites.