The fact that it´d cost less to flag could very well be a reason for many users to make use of it more often, which again would decrease the fear among Minnows & Dolphins as well to flag bigger accounts with crappy content.

The Downside could be though that we´ll see new flag wars being started which could reach epic proportions due to the cheaper availability. So I think it´s a good idea in general but shouldn´t lead to very low costs of flagging after all. A higher ratio might therefore be the better choice to go with in the beginning.