Allowing large payouts also drives value. It makes people want to get to the top, and the more steem you have, the more power you have to get to the top yourself, or get other people to the top. So people who make it, can sell to people who want to make it. Do you know how much money companies would pay to be able to reach the front page of reddit? Well how about a community where users are incentivized to be interactive with their brand/content. I'm just saying, it's a pretty sound model as long as there remains solid liquidity.

With the addition of poloniex today, cashing out has gotten that much easier.