Flagging does push a post down the ranks; I've never heard of summoning a moderator. Flags alone can also kill stories entirely if they come before it gains many points. The voting ring detection and flame-war detection code also push a post down the ranks.

So, the Lessig post could've been flagged, the comments on it could've triggered the flame war code, or a moderator did it.

What almost definitely didn't happen is "Apple fan boys at work" flagging down anything anti-Apple. When you use the flag link any more than extremely sparingly, you lose the privilege, permanently.

Flagging does, in fact push posts down. I believe the amount is proportional to the flagger's karma.

Psychologically, the UI seems intended to separate "I don't like this" from "I think this content is detrimental to the site". This communicates that users should not attempt to punish links they simply dislike, but may do so with comments.

Yes it does, and PG is allowing everyone to have basically an infinite amount of flagging now. It used to be that if you used it more than 10-20 times (maybe in a period of time), you would have the ability removed.