One potential problem with the above idea could be that there wouldn’t be enough funds from donations to fund the proposals to add new funding sources, but I’m assuming Steemit’s initial donation should easily cover any such costs.

I hope so. I don't see donations being plentiful or diverse enough in the long term to be able to cover the costs of the various development needs. I think that this is a suitable compromise however and I do think that pretty early on, the need for alternate funding will be recognised.