For a long long time people have been complaining about the inability to downvote articles on HackerNews, which means that articles can only be voted ‘up’, and no amount of karma gave you the option to counter an upvote.
It looks like that has changed. A controlled experiment shows that the ‘flag’ option is now counted as a component in the ranking of articles on the front page, effectively allowing you to vote an article down. It’s hard to establish the precise relationship between a ‘flag’ and the position of the article on the page and so it is equally hard to guess the weighting of such a ‘flag’ relative to an upvote but the effect is unmistakably there.
Interesting aside is that flags (contrary to votes) can be undone in case you change your mind about them.
HackerNews is full of subtle tricks to make the site better and it’s easy to see why this was added. When an article receives a number of flags before it gets to 10 points the article is automatically killed. But articles receiving flags after that are still going to be ranked on the homepage along with every other article. By taking the number of flags in to account the weighting can be updated to reflect the change and the homepage should theoretically improve in quality. The downside of this being an obscure feature is that knowledge of it could be abused by the less scrupulous to push undesired articles off the homepage using a series of flags.
Another way to abuse this is by downvoting everything except for the articles that you upvote.
No doubt PG is also aware of these obvious possibilities for abuse of this feature, so I fully expect that such abuse would be met with instant repercussions, such as your flags and/or votes being ignored. That’s speculation though, the flags-as-downvotes bit is definitely not.