I'm with you man. But perhaps it's fairer to think about it in a bit broader terms. The ICOs brought to the blockchain, or rather to society as a whole, a model for open sourced crowdfunding, much like Kickstarter did about a decade or so ago (or thereabouts). However still far less regulated. But more open and public, if you care to find the information. The problem here is the legislative restriction that the ICO tokens CANNOT be simply shares in a company, they MUST function as some kind of currency token or something (at least as far as I know in Australia and perhaps the US). Mind you this is a step up from when governments weren't even sure whether they'd call altcoins currency at all, or allow them. It's also a step up from altcoins literally only vying to be a replacement for Bitcoin, rather than bringing something entirely new to the table not just restricted to currency (like Ethereum did).
You're right in saying Steem works, right now, we are using it. It's not perfect, it needs some more polish but as it is it works solidly as a minimum viable product. If this is the minimum then we're looking at something really special.
As for funding ICOs that aren't even at the prototype stage, that is simply the name of the game with tech investment. It's ok if you don't want to invest, and I'm with you on the cynicism of wanting to invest only to make a quick buck a set time after doing so. The sad truth is that by far most of real world investment works that way. Both for good and bad reasons. When people say "why didn't I invest in Google / Apple / Facebook / Ebay / Paypal etc. etc. 10 / 20 years ago? What was I thinking????" the reality is, you didn't because there were like 10 other Googles or Facebooks, and you don't know at all which one is going to succeed. For every Google you get 100 or 1000 or even more startups that either fail in their first year, or fail after a few years, or launch something but don't get enough traction, or at best maybe get bought out by a competitor who then either puts that IP to good use or just throws it away because they just wanted the competitor eliminated. That's why they're called "unicorns", because they are very rare.
Some investors go for the really disruptive, epic long term movers and shakers and are more risky with their investment. Most want to invest $250k and in 2 years they want this doubled or tripled or whatever. This may well be before their product launches, this new money can well be from the next funding round. In Silicon Valley we see this all the time: Investor A gives company 200k seed fund, wants 300k back in 1-2 years. Company tries to get more investors at the same time and maybe secures 500k in total, 300k from Investor B who is a bit more loose with the return on investment. Company then bends over backwards to build a working prototype as quick as they can, and do more market and legal research, come up with more new ideas and so forth. Then they go and make some hype, talk to more investors, play up the fact that they raised all this money to inspire confidence. Say they luck out and next year Investor C forks out 2 million and demands a bigger share of the company, but also brings experienced legal people or project managers or market researchers or engineers or whatever to the table. Company then goes to investor A and B like hooray if you like you can cash out as per your initial request, or stick around. Or they might force the investors and say look we have a deal, here's your 300k I want my shares back. Investor A doesn't really give a shit and says hell yeah thanks for the 100k extra. Investor B says they want to stick around and see where this goes. You can repeat this for many rounds (I believe Uber is STILL in funding rounds, like D or E or something, can't remember but they are still not "launched" in the way that Google or Facebook are). And sadly this kind of food chain like behaviour by far dominates Silicon Valley, because like it or not there will always be many failures for every success. I'm a scientist by trade and trust me things not working is the natural state of affairs lol. Making it work is the truly special thing.
This is usually called the "Greater Fools Game", because fool A bought something and the only way to get rid of it and make their money back, or make some more on top, is to sell it to an even bigger fool who got sucked in on the hype, who then looks to fool C to buy it off him and so forth. Sadly the world of cryptocurrency right now is, and I'm not joking or mincing words, 100% greater fools only. The "money you make of bitcoin" is the money that countless suckers put in the economy hoping to also make money, doubly so when you're cashing out before a big slump. The whole time people are buying and selling. But sadly the bitcoin bought is simply not obtained for use but for hogging it because there's 12 million or however many and banking on the fact that in the future it'll be "worth" more. Well yes if you bought some when it was 20 cents and sold it a month ago, you'll be laughing. But that wasn't the point of that project, at all. The point was to provide an open source payment platform the rivals the financial tech systems of banks and credit card companies. The same goes for altcoins too, which frankly went nowhere even for all the hype.
With Ether and ICOs it's a bit different because they are more tied to something resembling the traditional startup funding economy. I honestly think it should be even more geared towards the startups and real products in the real world, rather than yet another app targeting another bullshit first world problem that no one really needs fixed. I can't say I'm unbiased because I myself am looking at starting an ICO around Nanotechnology research and science funding in general, but I sure as hell don't have money nor the time to keep up with the hundreds of ICOs that exist by now (and hundreds more every year).
I'd weigh in on the point about buying Steem that sooner or later, there has to be a real business case for people to actually buy Steem, otherwise no one on the platform will ever make any money. For now it's very much still part of the regular altcoin crypto trading shenanigans on the exchanges, driven by god knows who manipulating the market at any given time. But there needs to be a really good reason for someone, anyone, to have to buy Steem. Something I can think of is similar to Reddit Gold, basically tipping people directly. Or buying funny badges for people. Or buying gifts. Or advertising (yes I hate advertising but the money has to come from somewhere). Or who knows what. But it needs to happen or we're boned lol.
