There are much worse things than receiving negative karma, such as having the red dot on the profile (zoom 1) for not declaring multiple accounts on the forum. That, among other things, will make it impossible for the user to participate in signature campaigns...
Exactly. The red bar on a profile speaks more louder than the -Karma itself. Though when you received -Karma it is painful but when you do well and create good content then when more positive karmas inflow then your negative karma you were angry with would be a thing of the past. But the red bar has different interpretation about the user. Probably he is spammer, shitposter, scammer etc. And the worst of them all you can't use the account to participate in signature campaigns, and bounty hunting.
You are absolutely right, I think sometime last week or last upper week, I in a row, received like 2 or 3 negative Karma, possibly for my thraad on my suggestion to the admin to scrap the Negative Karma system and let users only use the report feature instead of giving users negative Karma, this suggestion I believe didnt sit well with some forum users, but instead of them commenting their disagreement and moving on, some went ahead to give me a negative karma, it was actually painful watching my earned positive karma drop 2 to 3 times in a row, but I completely just ignored it.
Today, those positive karma I lost, I've earned them all back again, which indeed shows that, it's perfectly better to lose karma, then do what will you get the red dot, for actually, it's completely over for any account that gets the red dot, yeah, the user can still post and participate in discussions on this forum, but he or she will never be taken seriously by other users again, and worst of all, like you mentioned, such user can't be accepted into any forum activity, promotion, like signature campaigns, any contest, raffles and so on.