A good idea with the arbitration court, at least for the time being, because in the long run it would probably have to be further elaborated if the number of users were to increase extremely and at some point there were simply not enough personnel left to be able to handle the flood of cases. Even I, as a user who is generally against downvoting, can't offer you a convincing alternative and, based on your arguments, (unfortunately) have to admit that they are necessary to a certain extent, even if not to the extent that they are done here.

To make a rough suggestion, how about some kind of committee that has to approve articles before they can be viewed by everyone on Steemit, this could make downvotes superfluous, which would otherwise only be necessary for posts (spam, child pornography, etc.) that, if sorted out, would not be published at all. Of course, sooner or later the problem with the mass of posts will come up, which cannot be handled by humans, but maybe it would be possible to limit this by a kind of "logarithm", so that some posts will be "sorted out" by the system in advance to relieve the mentioned employees.

As I said, these are only rough suggestions, which, if they bring something, will surely have to be thought over further, but who knows, maybe a professional can get some kind of food for thought in the right direction, so that his results will be more concrete than my suggestion. ;-)