The article hasn't been removed from HN in any way. It's just lower in rank because that's what user flags do. I'll try to expand on this later but my phone just rang.
Edit: ok, it's a bit complicated because the influences of these factors are constantly varying, so giving you an accurate answer means sounding like I'm contradicting myself. But at present, the story's rank is only being affected by upvotes and user flags, not by the anti-flamewar software and not by moderation.
The tug-of-war between upvotes and flags on HN is the fundamental dynamic of how the community expresses what it wants. There's a balance between the two and it has worked this way for a long time. Sometimes upvotes get the upper hand, sometimes flags do. But it works the same way in every case, more or less. You're right that part of the community is interested in discussing the article, but then another part of the community feels otherwise. Both matter, and the community is rarely in agreement.
If you're in the camp that wants a particular article on the front page then obviously you will be tempted to conclude that the other camp is trying to suppress the topic, possibly with help from secretly-opposing-you mods. Usually this is not accurate—it just feels that way. In reality there are many more things that go on. One is that when a similar article has just recently been thoroughly discussed, the community's distaste for repetition kicks in. It isn't that people oppose the topic, it's that repetition is boring. In cases like that, we turn off the flags only if the article is unusually substantive or contains significant new information. I don't see that here.
Another factor is that if there weren't countervailing mechanisms like anti-flamewar software and moderation, attention would flow, every day, to the same few controversies that happen to be hot that day. Empirically, that's just what upvotes do. No one wants an HN that looks like that, and we need both software and moderation to actively prevent it. To have HN be HN—that is, a site about intellectual curiosity—the system can't be purely upvote-driven. From our point of view as moderators that's all we're doing: providing a systemic service. But from the point of view of people whose wishes about a particular article are thwarted, it feels like moderators are intellectually, politically, and even personally aligned against them. People notice the cases they dislike much more than all the times the roulette wheel comes out in their favor, so it's both easy and common to feel consistently aggrieved, yet still come back to the site every day. That's kind of weird if you think about it.