Flags were created to attempt to supplement the trust system and make scammers more obvious. I feel like there's both sides to a coin; on one hand, banning scammers would prevent them from pulling off more scams, on the other, banning them forces them to create a new account and continue scamming.
That is a weighted coin that you are providing: the two halves are unequal. Preventing scammers from pulling off more scams = good. Forcing them to create a new account and continue scamming = good. Why? Because the only part that you are influencing is the former half of the latter statement:
forcing them to create a new account [in the event of a ban]. They are never
forced to create a new account, but they always have the ability to do so which multiplies their scamming potential and spread to users. But when you ban them, you take away one of their accounts which is an active threat - focus on the now, rather than what they'll do afterwards, especially if they would have eventually done it anyway.