The main crux seems to be about retaliation and use of voting power.

Retaliation can be handled in an alternative way in the current system: by setting up flag trails off the blockchain, and starting to flag only when the trail has accumulated enough power for flagging (with a healthy amount over the SP of the opposing side). This also helps a bit with voting power if you have enough power.

Considering the VP use, I think that's a reasonable cost, whose benefit is returning rewards to the pool for the good of everyone else.