Based on current evidence you're completely right, people aren't interested in sticking around and we can't compete.
However, we've never actually paid anyone significant amounts of money to develop a social media application - I mean PeakD has been put together for hardly any funding, and it's not bad for free!
It would be nice to actually pay Devs to just put something world class together, or just pay the LEO team from the DAO as they're on the case with a working model.
However I get the impression that there's not enough HP interest to get such things funded, so I think we've no chance of giving Hive as a blogging chain a real shot.
I don't necessarily think reducing the rewards pool is a bad thing, I'd hate to see it go altogether though.
As to marketing, that is a real tragedy - I mean the twitter campaign, I'd best not say anything as there's nothing good I can say about it.
I think that's a case of 'anyone thinks they can do it' but clearly everyone whose involved is just crap at it.
We probably are fucked already. As someone else said in the comments, who fucking looks at page 2 anyway?