You're spot on, risk and reward are inevitably tied.
It is unfortunate that new investors are sometimes taken advantage of with a shiny new object like high APR. You generally can't really blame them for what they don't know about it; they see the staking rewards come in and think nothing of the big picture.
I really think the idea of these decentralized projects are here to stay. It probably will turn out like the dot com bubble/crash played out-- many investors got burned as companies went under, yet out of the ashes came Google, Amazon, Facebook, etc, with new fortunes made by investors who came in after the crash.
Microsoft again serves as a good case study for the typical innovation cycle. Buying at the peak in '99/'00 was disastrous for over a decade+ (never fully rebounded in price for a long time), but if you got in after the crash you've easily 10x your money and more.
What's great about being an early adopter is having the opportunity to potentially see those projects that emerge from the ashes before the general public does.
What makes it difficult is how quickly the world changes in technology, and how unpredictable outside forces can sometimes pick the winners and losers.
The antidote, probably, is diversification... also patience and discipline to dollar cost average through a brutal downturn (-80%, -90%, or even -95%+) in the context of a balanced portfolio, and humility and flexibility to invest in the emerging winners even if they aren't part of one's original portfolio (overcome sunk cost fallacy).