Flags (asking a moderator to step in and take action) have never been appropriate for decisions which require a technical opinion. They are for things which are in the wrong place (questions in the answer section, non questions in the question section, ads for purses or movies) and which can be seen to be "in the wrong place" by any one person who looks at them.
Dangerous and insecure code, whether in an answer or elsewhere, is not special. It is in the same category as really slow code, code that wouldn't actually compile, code that would run but not do what the OP asked for, code that looks ugly, code that will be hard to maintain, code that is vulnerable to not working any more when a new framework is released, and code that works with today's version but not with the version the OP said they were using. All of this is "not useful" and earns the answer a downvote. If you're a nice person, you comment on the answer saying "this is vulnerable to SQL injection" or "question says for version 3.7 - this was introduced in 4.1 so it's not going to help" and so on.
Flagging an answer as insecure would introduce three problems:
- how would a moderator know, without expertise in the subject, if the flag was valid or not?
- if they did find it valid, then what? Do you want the answer removed, or just a banner on it saying WARNING: a qualified person has determined that this code has security vulnerabilities, do not use it - you can have that any time by commenting, of course. Would you like it utterly removed? Why, if there is good stuff in the answer (like parameters to an API or meaning of some options) that the OP could use?
- once SO takes on responsibility for assuring users that no answers will contain dangerous code, what happens on the day some dangerous code goes unflagged, is shown to users, and is relied on? Is SO somehow responsible for that now, on the grounds that mechanisms were in place to remove insecure code from answers and should have been used for this one?
I see a giant hassle with loss of information for askers and later readers, liability for the network's owners, much harder work for volunteer moderators, and no benefit. Comment on the insecure answers, provide a different version of the answer yourself that is more secure, downvote the insecure answers, promote links to the question encouraging others to answer or downvote or comment as well, and make the internet better that way, instead of trying to get a feature added that would enable you to ask a moderator to do all that.