Because blind vote selling will have a lower return than sensible curation and also has a higher risk of drawing downvotes. even further reducing the return.

Minimal effort to avoid downvote. Thus the "Do you hate photos, do you hate art."
Im not seeing lower returns. Vote sellers will adjust which will make buying votes cheaper. For 10$ worth of SBD you will be getting a much higher vote value on your post then you are getting now which will in turn make the trending page look much worse.
There will be an exchange of lower liquid payment for more curation.
Ill be 100% sure once someone does the calculation but im pretty positive that a vote selling adjustment will happen fairly easily.

That's close to none, and in any case nowhere near enough to place any sort of meaningful deterrent against or remedy for milking.

Yeah. Mentioned the flag abuse as an example of behavior.
Not going to change because... again.. Minimal effort required to avoid flag.

Reducing the cost will encourage more stakeholders, most of whom are not malicious trolls, to make use of the downvotes.

Sure. Its both. But its not both as in the reasons are equally present. Its not fifty fifty, its something like 95/5..
Fear of retaliation, fear of marginalization, fear of stigmatization, fear of losing potential profit, fear of losing supporters, fear of losing witness votes.... etc.

You assume free downvotes would increase downvoting. Thats extremely shortsighted, again since it dismisses every behavioral aspect and reduces human behavior to that of a dogs.
Who would the free downvotes cater to? Those that fear retaliation wont care. Small accounts wont really care since getting or losing a cent means little.
Big accounts that circle jerk wont care. Big accounts that sell votes wont care. Witnesses wont care.
Who is it that will change their behavior and downvote more once you make downvotes free. Im almost a dolphin and my behavior wont change much. I know minnows wont change theirs either..

See there is this problem that stems from wishful thinking. It stops people from going deeper into the subject matter and they simply go with the surface level assumption that suits them most.

You are not understanding that the current system is broken and creators aren't making much already.

Oh i understand that. I understand that absolutely, completely and passionately.
Just because i dont agree with this change because i think it will make things worse doesnt mean i think everything is great.
If it was up to me id line up all those idiots that dont understand that what they are doing is hurting the platform and their own investment, and start a slapfest till the sun comes up. (I collectively call them retards, which is the only name that suits the person that is willingly destroying his own investment.)

Economic incentives have a very limited effect. STEEM is not a business. Its not a company. Its a society. And mechanical change, like this proposal, will not do much good when you dismiss the complexity of human behavior.
To change anything, you need to adress behavior...

And the only way to do it is.... unfortunately... TO BAN IT.
Or cosmetically hide it by removing the vote value content placement algo. Which is again a bandaid.