Steemit is still pretty new, so I don't think we can say it's doomed just yet. The site is evolving fast and it needs to gain features that will make it attractive to more people. For now it's mostly early adopters and there is a bit of a dash for cash. It does need quality content to attract people, but if everyone is just trying to game it then that won't happen. They need to attract people who will bring in others.
I've seen a similar progression with Tsu. They had a good business model, but still couldn't attract good content creators. A few people did well from it, but most made pennies. Of course it can never be that everyone makes a lot, but people need to see a fair return for their efforts.
Does Steemit have investor funding? They can only survive if they actually make enough to cover costs.