I try to pride myself on being fair and efficient when raising flags on SO and am trying to keep as high of a ratio for helpful:disputed(and now declined) flags as possible. I raised one today for a question as "off topic". It states that a moderator declined the flag, but then the question was closed as "off topic". How can a flag be declined, but the question closed for the exact reason that the flag was raised for?
Someone else had thrown an Offensive flag on the same post for some reason. Since the moderator who processed that flag didn't agree, he declined it and your (correct) flag was declined at the same time. Sorry about the confusion this causes, but declining invalid Offensive flags is a high priority.
It could mean the moderator who reviewed your flag thought it was an acceptable question, while another moderator and two other users thought the question was off-topic.
Generally, users mark as useful a flag that allowed to discover a problematic post. Since Stack Overflow has many flags to handle, it can happen a flag is dismissed as declined, or a moderator gives a quick look at the post and thinks it is fine.