Flagging is a very nice and important feature that helps to make the site clean and effective.
Should the helpful flags be rewarded to promote the users ?
It was tried, sort of. There used to be something called Flag Weight that was similar to reputation, and some users enjoyed the "game" of trying to increase it. It had some problems, though — it punished good flaggers disproportionately for mistakes, and complaints about rejected flags were constant. There's still a count of helpful flags on your profile page though, and there are badges for flagging (e.g., Marshal).
IMO we don't have a problem with not enough flags, so encouraging it further is unnecessary given the potential downsides.