Really well written and considered, my friend.
The ninja stake hasn't just become a problem since Justin bought Steemit. It has been a huge drag on the ecosystem from day one.
There is plenty of blame to go around for everybody: Ned (and SteemitInc), Justin, the witnesses past and present, and all of us. Me particularly if I'm being entirely honest.
What to do? I like your program. I might add limiting witness voting to 5 per account. I realize that sock puppets could still be possible under that restriction but it would make it much harder. Plus I think it would tend to make witness selection much more representative for and to the community. While we are at it we should make voting (all voting) be limited to members that have logged in during the last 3 months. The endless votes of some stakes that are no longer active in any way are poisonous, too.
It is interesting to say the least.
I agree with both of those suggestions and would hope they would be explored under the commit to make the system trustless part. I know there are a lot of ideas out there .. the umbrella is really fix it by considering ideas seriously not just knee-jerk rejecting