There are few key differences, one of them being that - to my knowledge - SMTs won't be tradable to other pairs, but only to STEEM. This may be a drawback, because you have to convert your tokens to STEEM first if you want to sell them and you can't really showcase them on Coinmarketcap. But it can also be an advantage, because they won't be dumped as fast as it happened with some ERC20 tokens. STEEM acts like a buffer here.
As for this:
What's going to cause them to flourish and produce and not end up having similar failures?
It really depends on the execution. The underlying technology is relatively similar. It's like we're having a few startups building on top of the web technology. Some of them will build nice things, some of them will fail.
Okay. I'm wondering if there's going to be any kind of screening process for SMT applicants. If they need to have a whitepaper that makes sense, or some decent backing. Probably not, right? Anyone who wants to set one up and has something to set it up to will probably be able to get one.
I like the idea of keeping things in STEEM. It's too bad that they need to be converted first. That's just going to add to the process, unless at that point we have enough products and services that we don't need to go beyond STEEM. Wouldn't that be nice. :)