Even if it is linked externally, Steemit serving the links could be liable for using copyrighted content in their business. Although it is on the Steem blockchain, Steemit doesn't have to serve the content. They should implement a copyright compliance team. Steemit is a centralized entity and thus is liable.
That is unless the user is downloading a client and the user is deciding which content from the blockchain the user wishes to request and view.
So that's why this guy made $40,000 on this one single post.
https://steemit.com/piston/@xeroc/piston-web-first-open-source-steem-gui---searching-for-alpha-testers
Can the blockchain handle every user downloading the content in real-time from the witness nodes
Witness nodes don't serve data to users. They just sign blocks. They're run locked down without any user-facing services.
User data is provided by API servers, similar to Electrum nodes. Anyone can run one. Whether that becomes a paid service (or similarly one provided by app sellers to their users) remains to be seen.
Most of the content is pretty small anyway. As discussed a few comments back, it is just text and links. Embedded media is external. The bandwidth requirements for a full node will be high due to the size of the blockchain, but one such node will be able to serve many, many users with relatively little bandwidth per user.