I realize I am taking a risk by reopening what seems to be an old, hoary, and thorny discussion. However, it seems that in all the long discussions about Meta Stack Overflow reputation, what it means, and why it's separate from reputation on other sites, I have never seen a complete answer to this question:
If reputation on Meta Stack Overflow is used by the community to indicate agreement with an opinion instead of the quality of a post, why is it still tied to site privileges?
The association between reputation and privileges makes sense on other Stack Exchange sites, where reputation is a measure of your participation in the site and the quality of your questions and answers. If you contribute positively to the community your reward is increased privileges, whereas your punishment for "polluting" the site with bad questions or unhelpful answers is a loss of privileges.
However, on Meta Stack Overflow, reputation is a measure of the popularity, not the quality, of your contributions. Tying reputation to privileges means that losing privileges on the site is a punishment for expressing an unpopular opinion, and gaining them is a reward for agreeing with the majority.
I don't think that tying privileges to popularity makes sense as a feedback system. It doesn't really encourage quality contributions, and even worse, acts to suppress minority opinions through the threat of losing privileges. As a user with fairly low reputation, I am afraid of asking a question that may be controversial, because if enough other members disagree with me I will be stripped of the ability to vote and chat. Even if I had higher reputation, I would still be concerned that expressing a controversial opinion would cause me to lose helpful privileges like retagging and viewing close votes.
The FAQ tells new users "not to be concerned" by downvotes because all it means is that the community disagrees with them. However, I think new users have every right to be concerned about downvotes, because they still mean the loss of privileges.