As for the insiders killing it, it is irrelevant. What is relevant is the cost to attack. Because an outsider can just buy enough stake at X cost and become an insider. As for Proof of Work, I believe it is more costly.
Of course not. On the contrary. if you want to do a 51% attack on consensus decisions, you need to own 51% of the market cap. That's MUCH MUCH more of a cost (in bitcoin, it would amount to having to buy up 20 billion $ of coins, but your cornering of the market would make it still much, much more expensive).... in order to destroy the system for which you just paid 20 billion ! No miner is ever going to invest 20 billion in mining equipment, because he will not mine 50% of the stake in block rewards and fees !
Also, the cost of a 51% attack in PoW is just the cost of 51% of the mining rewards, and you don't need to be stake holder. From the outside, you simply cannot attack a PoS system, because it is based upon much harder to fake digital signatures.
Currently, ALL of the proof of work ever delivered to bitcoin has a security level of 90 bits. A simple 256 bit key signature has a bit security level of 128 bits, and only costs a few milliwatts of power and an old laptop (or even a mobile phone).
Cryptographically, PoW is pure BS as a protection. Any digital signature beats it with tens of orders of magnitude in "efficiency" (that is, spent resources versus security obtained).