You're onto something here, we need better features to encourage content consumption, right now it feels like everything is designed for creators - which is great, BUT, at some point we need to get more people coming here as consumers!
One devil's advocate sort of note - isn't this how Facebook feed started? First it was an optional, experimental feature, next thing you know it was permanent and could not be taken away. Your ideas about keeping it off-chain would help avoid this, although it doesnt stop the main portal (right now steemit.com) from eventually adopting a "permanent" smart feed that warps who gets seen.
I don't think it would be like Facebook anytime. Facebook has a private centralized and closed-source backend and it's pretty quick and easy to change things. For us, if it's on-chain everyone can see the algorithm and community should approve to adapt. If it's off-chain still the algorithm is visible (since condenser is open source) and if someone doesn't like it they can use another solution like Busy or eSteem.
Yeah, good point.
I think this is a huge reason for building some of these tools into the front end via browser extensions + a steem-rpc call to the blockchain. It would also allow for endless and more personal customization.