the problem with PvP flag is that it only solves part of the issue. there are still ways for griefers to abuse the remaining game mechanics for nefarious actions...
As we would still have collisions on... In most other MMO's, we do not have collisions, because that creates situations that could be abused, like how griefers in The Division went on a "coffee break" in the doorway to the room where you received and turned in quests, and this was in a safe zone, and we have already seen the very same in Elite, players jamming themselves in the station mail slot... So this one situation we already know we will have to deal with, as it is currently an issue today... and if we remove Solo and Private group, that would not be an option no longer available for players to get around this problem.
And this is not the only problem we would have with the collision between players. If we allow the PvP control collision damage, to avoid players ramming other players to death, or abuse station mechanics to suicide on speeding CMDRs, we would create bouncing castles, where players could use other players ships to fling themselves in unpredictable ways. we have already seen how SRV's can be flung in really unpredictable ways, and we have also seen ships and onfoot CMDR's experiencing other various strange collision behaviour, where one is flung very far away. This is yet again, not something unique to Elite, several other games also have strange behaviour in their physics engines, giving similar strange behaviour from time to time...
So lets turn of collisions then. That introduces a slew of other issues. So instead of me colliding with your ship, I can now fly straight through it... how would that look? should we make the ship transparent when they "collide"? if we do not, I can use this mechanics to block your view.. and if we only do this between players ships, you could still crash into NPC ships, and if I can block your view I can certainly make you run into NPC ships... this would somewhat solve the issue of players parking their ships in the mail slot. but if you could not see what is behind the blocking ships, you could wedge yourself in there with a NPC ship that you did not see travelling from the other direction. And turning of collisions, will remove alot of the "immursion" of the game, in most other MMO games, this is not really a big thing, but in ED, your ship is a big part of the experience, and they are often big and they need space, and flying through other ships would most likely degrade this experience. And being able to fly through some ships but not others, would make for a more inconsistent experience, that would more than likely be exploited by griefers in one way or another. Just like how they today exploit the suiciding on speeding CMDRs in the no fire zone around a station.
So there is quite alot more than just a rewrite, you have to go and check EVERY mechanic where player can interact with other players and do damage to each other and test and make decision on how do handle this and that, and we will end up with worse mechanics as a result of this.
I am not againt a PvP flag system, but I cannot see how such a system could be implemented without wrecking havoc on so many levels on how the game is experienced.