Indeed demand can offset debasement, but when price turns down that is a bitch. Eventually you'll run out of new fools to give you their money to give away to those with high rep power.
Price of course can and will go down at times, but I can't see why price flactuations is a problem, now if you are talking about a catastrophic scenario, well this can happen anywhere and at anytime, not only in crypto.
btw I believe bitcoin is more prone to burn and crash in price(a catastrophic cripling scenario) than STEEM, with STEEM the average Joe is starting to use crypto, at least thats my impression.
It is simply supply and demand logic. The supply will always be way more important than demand at some point the thing will crash, thats what hyperinflation does. There is hardly any incentives for users to buy steem other thn speculative ones, people don't really care to have some voting power, most will certainely not pay just for it, the power of steem is to be able to earn free money and that create a lot of sell pressure
There are many ways in which steem could solve the inflation problem but the current system is not it and will have to be re thought or element added