So what do you fell that karma "earns you" that makes it worth the effort? Is it something intrinsic to karma, or something about what you think karma says about you to others? If the latter, then do you think karma is the best way to deliver that value?
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Brand new accounts can't flag posts (~200 karma) or downvote comments. (~2000 karma) Once I hit those thresholds, the urge to grind goes away.
I still have the urge to grind karma, though I've passed the limit for downvoting. The reason is that I remember when the downvote karma threshold was raised from 250 to 500 karma, a year or two ago. I'm worried that in a year or three, PG will raise the limit again, and I'll be unable to downvote again. So karma remains an effective motivator - though I kind of resent that I don't know whether my further karma generation will ever pay off. I would feel better if PG had an official formula or schedule for the inflation of downvote thresholds, or if he said that the threshold will stay the same for the foreseeable future.
Downvoting seems to be enabled around the 500 mark. At least for me.
Also, I just noticed the flag option for the first time. Thanks for pointing that out.
Yes, downvoting was enabled for me, too, after I passed 500 karma points (reached 501 points) on 2012-06-09, a month and a half ago.