So to answer your first question, that is kind of what is going on here. How it affects the entire community is that there is a limited amount of Steem in existence and it gets shared through the reward pool using the PoB algorithm. However if all the whales upvoted themselves then the reward pool would be depleted and the value of an upvote (and flag) will become 0, basically.
RE: @haejin is stealing YOUR rewards!!! EXPOSING THE TRUTH!