I've been hesitant to go into new and just start flagging all the terrible stories because I've read about people that lost the ability to flag. So I only flag on relatively rare occasion. Does such an overuse mechanism actually exist?
Not overuse, just abuse. If you'd like to flag some more but are worried about that, just send us an email at hn@ycombinator.com and we'd be thrilled to take a look and give some feedback.
I don't know how automated the system is, but would it be feasible to say something like "If your email address is in your profile, we'll try to give you a warning by email before we take action?" As it is, there's not much feedback on whether the flagging action is appropriate or not.
As someone who is a regular (permanent?) attender on HN's rate limit blacklist[0], I can say that from personal experience: You will likely not be notified before HN punishes you, but from contacting HN about said incidents, it's generally (maybe always?) a manual process by an irritated HN mod. And if you email them (hn@ycombinator.com) about your apparent ban, they're generally willing to converse.
[0]I was unable to post this comment when I wrote it, and had to wait.