@iamnotback

You are way overthinking it. Perhaps you are trying to fix the Internet and make sure that quality work gets rewarded, all of which is noble, but is almost entirely irrelevant to Steemit.

Steemit is a social media platform, and like all the other social media platforms it is not high art or journalism, but a platform for people to pass their time (consider how much of peoples' time has shifted from watching bad TV to social media), communicate (often without any lasting significance), have fun, show off, and generally do the things that most real people spend most of their time doing in this world. This will never change, regardless of technology or algorithms, because people basically don't change.

It will work fine for that. In doing so it will also introduce a large number of people to cryptocurrency, something they have never seen before in a reasonably usable way (if at all). Now there is a theory that most people have no use for cryptocurrency and if that theory is correct then that aspect of it will fall flat on its face, and probably the coin won't be worth much either (though the platform may still survive). On the other hand, it is possible that a large number of people from a wide swath of society with access to cryptocurrency, something we have never seen before, will find something interesting and perhaps unexpected to do with it. Or at least some subset of them will, a subset that wasn't being reached before. That might be enough.

The main obstacles are not that the incentives or game theory "aren't right" but more mundane things you have identified earlier such as the feature set of the platform (is it fun enough, can people get lost it it and pass the time, etc.), reliability of hosting (currently atrocious, and this is costing a lot in user growth), etc.