So from what I can tell, it's a rate limit. It's not based on Steem Power or Karma or anything. I fail to see how this will have the intended effect. Is there any data to show how people use the site currently? Post statistics or anything?

As a person, I will have to be much more selective as to which blogs I post in and will have to think much more about the profitability of my activities which might not be good.