As noted previously, this conversation has come up several different times, and the objection always tossed out is, "Well, what if someone uses it to avoid reasonable consequences, or to have any bad things happen to their character?"
It used to be something I found pretty compelling, because I enjoy having outcomes being up in the air, and I, personally, only have a few 'hard lines', and I'm not the sort of person who's ever had trouble just walking away if I wasn't having fun. And the times when someone has pitched a public fit or tried to have all the rewards with none of the risks have stood out to me.
So I get the gut deep objection.
But, the more I think about it, the more I think that it's not really a good objection at all anywhere but a hard PvP game - and that a hard PvP game //should make it clear what avenues of the game are appropriate for pvp//. Boundaries and expectations, publicly stated, are your friends, and if you state the expectations for conflict, and someone tries to throw a flag on a reasonable consequence within that expectation, then they're abusing what they agreed to, and that can be dealt with the same way any other abuse of the system can be dealt with. And by stating the expectations for PvP conflict up front, you give people a chance to actually self-select for games that give them the experience they want. Which isn't a bad thing. I have no objection to no-holds-barred, any-IC-action goes games existing, as long as that is //clearly and boldly stated// to the players, and people know what they're getting.
Outside of a PvP context - if someone doesn't want bad things to happen to their character, then that's a problem that tends to fix itself by players self-sorting into playgroups...and that's okay. Sure, when someone is like, "But this rules change ruined my plans, how could you, I'm hugely upset," to what I consider to be excess, then...I just avoid them. Likewise with someone who always wants to be the center of a scene, or someone who is so passive it's like playing with a rock. Those things are annoying. They are not game breaking.
Allowing people to be pressured into playing out events that are not just actively unfun to them but which could be actively traumatizing? That's not just damaging to the game, that's damaging to actual people, and I believe it takes precedence. I would rather keep ten "but I didn't want to go to jail" players than one "I'm going to threaten you with cutting off your RP with everyone or damage your OOC reputation unless you play this out" player. Hell, I'd rather keep twenty of the former than ONE of the latter.
Which isn't to say that some games may end up just not being appropriate for some players. If you're severely arachnophobic, then Spider Holocaust 2000 is not your game. And it's possible that some 'mystery' games might have aspects of the setting/theme that turn out to be impossible for a player to deal with. (Disclosure: On RfK, I played a human ghoul. My regnant was great IC and OOC, and never creepy. I still ended up leaving the game because the more I played and thought about theme, the more I realized I was never, ever going to enjoy a Vampire game outside of a specific sort of tabletop setting. I hadn't ever played Vamp before, so I wanted to give it a chance. Nobody did anything wrong, but it still was Not A Game For Me. And that's okay.)
tldr: Ultimately, the people who want to abuse other people are more damaging to the game than the people who want to play with no stakes, and I think games can mitigate what danger there exists of "consequence dodging" with this system by communicating specific expectations, then treating violations of those expectations the same way they deal with any other player complaint.