[sirclueless]

    This has a big impact for stories that get a lot of upvotes and
    downvotes (e.g. controversial stories) as they will get a lower
    ranking than stories that just get upvotes. This could explain why
    kittens (and other non-controversial stories) rank so high :)

That actually seems backwards to me. A controversial story (that is, one that triggers a lot of votes both negative and positive) would do just fine so long as it continues to receive more upvotes than downvotes.

That's not to say that downvotes don't put a damper on things -- if a story gets 80% upvotes and 20% downvotes it will get 75% the score it would without downvotes, which on a log scale is 87.5% as high a ranking.

But the point is that things are still roughly linear -- you only need to stay positive (> 50% upvotes) to accrue score, and you will do so linearly. Maybe I am underestimating how competitive scores are, and how important upvote rate is. Maybe a small linear damper on upvote rate has a large effect relative to other content? But it definitely seems like this system encourages interesting, controversial content over bland, well-received content.