This definitely discourages posting things that won't be highly upvoted.

The problem I have with this is that absolute number of upvotes is not equal to quality of a comment.

A good comment posted under less popular news item will get eyeballs, less upvotes, and lower poster's average.

Similarly participation in long thread (even if that's constructive thread, not a flamewar) or response far down the page is unlikely to get many upvotes, regardless of quality.