The reward pool is limited and shared between all users. When someone assigns a reward to himself or his friends, that part isn't available for others. There needs to be a balancing to be able to really reward the best content instead of the biggest wallets.
Downvotes have been a part of steem from the beginning mainly to achieve that balance, it's the reason that's given for them in the whitepaper. They have been mainly used for serious abuse like plagiarism or spamming because they cost something for the one giving them, so there were only a few people willing to do this in the most serious cases. That's why we got a free budget now - to have them be used for their original purpose, the balancing and to get closer to the goal of giving higher rewards to better content.