To me, "flag" means "this is a serious violation that requires moderator attention". Something I'd want you to see and deal with because it's bigoted, illegal, spam, etc. I wouldn't flag something simply because I didn't think HN was the right audience, or because I personally dislike the topic. You seem to be encouraging me to use it simply as a downvote.
I'm not going to start flagging things, nor do I feel that strongly about the lack of a downvote, but if flags are effectively downvotes behind the scenes, and if that's how users are treating flags (which they obviously are, from other comments on this thread), I think the UI should have a downvote button.
I assume there's been discussion about this before and I'm curious about the thought process behind the decision. I don't find the FAQ to be informative about this.