Thank you for the good input! You make some strong arguments. However, I think you are not seeing clearly the massive improvement proxy voting could lead to.

Identity and Reputation
We agree. That is why we believe so strongly in proxy voting, because it would allow Identity and Reputation to be implemented at the application layer instead of in the protocol.

Proxy Voting
The brilliance of proxy voting is that the stakeholder would, rightfully, retain the power over her own steem power, but has the option to temporarily distribute this power to other users according to her own formula. Let's say we have 10 whales with different ideas, who are also looking to be entrepreneurs in the space. They could test out 10 different ways of distributing votes to their own user base. Now THAT is horizontal scaling. Let the free market decide which formula works best! For example, we at BitSpace could get an investor involved, buy up a good chunk of STEEM and use that STEEM to establish a flourishing community according to rules that we set ourselves. We could test out reputation and/or identity systems at the application level, and use that with proxy voting to find better ways of curating content efficiently.

Today that is not an option. Our new users could vote their hearts out, but the yield for the users would be close to zero.

Curators
Unfortunately, the way it works now, a new user has close to zero voting power. There is almost no point in voting, unless you buy some STEEM power first. That is not a good way to attract new users. Give normal users the voting rights over whale power (through proxy voting), and suddenly you can have fresh curators with meaningful power in the system.

Posters
While this might work, we believe that proxy voting and the parallel development and horizontal scaling implications have a high chance of establishing voter formulas that will yield better and more fair rewards for the posters.