That's an interesting description of events.
Of course, you had to simplify.
This led to a concentration of wealth and power within a small group, undermining the democratic ethos that Steem initially promoted.
(Talking about how 'users' were 'gaming' the system)
The main problm really was (and still is):
Right after inception a very small group of people got pretty much all the stakes.
These people all know each other and collude in sercret rooms.
This happened practially on day one.
They sometimes disagree on some things, but they all work together, to defend their stakes and their power. Any 'trickle down' effect gets largely overshadowed by how huge their stakes are.
To top it of, those select few got bored of curating content after a few days.
This is what's wrong (or at least a big factor) with Steem and Hive and always was.
Anyways, nice writeup, just had to comment about this aspect.