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RE: How is this even legal?
Not sure but I believe that comment came from @smooth, and it's not just about not being able to pay for servers, it's also a different security risk - think competitors, bribes and all that other nice stuff. Not saying that's what smooth was pointing at but I'm sure it's something that can happen/has been attempted, even though I doubt enough witnesses would go for it for that to be a possibility.
I saw it publicly first voiced by TRW.
I do understand the reasoning and would have been totally fine with 8/2 as it would have shown that witnesses, several of them also involved in development and thus potential benefactors of the DAO, were open to also contribute a (small) share.
After all, while the Steem blockchain could be used just for its fast tx and easy wallet which doesn't require any additional app download, the core of the chain is creation rewards. Ergo, without creators... don't need all those witnesses either because very little raison d'être.