I don't think there should be a badge for flagging a post because it can encourage new users to flag just to get the badge.
One potential problem with flagging badges is that they are awarded immediately. This can make flagging non anonymous in case you cast your first flag on a post and that flag causes a post to disappear.
This happened to me on Area51, a site with relatively low activity...
But it could also encourage people to flag when necessary.
I do believe that people flagging just to get the badge get what they deserve (since a moderator will look at the post and see nothing wrong).
Any tool or rule can be misused. I don't think it make this badge useless.