First, the fears.
Signals About Reputation
Suppose we have system that persistently fails to do what it's ostensibly designed to do. It can still be perversely hard to replace that system with another, for ways that are fairly easy to understand.
Take, for instance, the United States college and university system. Currently, it often fails to provide people with skills relevant for jobs. It costs way more than it should. I think most people know this; it's the subject of many looong articles with graphs where the costs skyrocket upwards to the right, and the employment rates trickle down slowly to the right, so I'm not going to argue the point; it's becoming common knowledge. So, if it is becoming common knowledge, why do people keep going to college? What's to prevent, say, some non-collegiate form of education from quickly replacing it?
Well, suppose we open some alternative form of education for a field like computer science. Think of things like massive online courses, MOOCs like Udacity or Coursera or whatever, or coding bootcamps, or really anything. Given that colleges kind of suck, shouldn't these be able to replace a big chunk of their business all of a sudden?
Well, a big chunk of the people who are going to attempt to go to these new institutions are, unsurprisingly, those who could not make it in college. They're those for whom college isn't even possible. Similarly, those for whom college is only marginally acceptable also might give it a go. The top 1% of students, for whom college works out great, because they're brilliant or lucky, aren't probably going to try something new, because they already ok with the system.
So the effect is, regardless of the overall merits of the alternative educational platform, it runs the risk of getting crowded by people who are less hard working, or less talented, or what have you, than many college students. This is the case whether or not it is objectively better. So it attracts a reputation for having graduates who couldn't crack it elsewhere. This means that people will generally avoid hiring from it. This further prevents the best students from going to it. The cycle downwards spirals. And so it might fail.
(Now, in fact, some bootcamps have attracted such reputations, while others have not. All depends on how stringent the bootcamp is, as well as how crappy most colleges are. You're probably better off going to the top 5% of bootcamps than the lower 20% of colleges, in my opinion. I'm just trying to describe a possible dynamic, here. Although in full disclosure, I did go to a coding bootcamp, and then helped teach there, so I am biased.)
Now, let's imagine, that instead of thinking about allocating reputation and rewards for people in programming and computer science, we're allocating reputation and rewards for poets, and thinking about Steemit as an alternative rewarding-and-reputation-giving institution.
Really excellent poets, you could say, probably already publish their poems in... whatever journals or magazines publish poetry. I don't really know what these are. They're happy with the system, so they won't join Steemit. Pretty good poets, who think they have a chance of getting into these high-prestige publications, also don't join Steemit, because they think they have a good chance. On the other hand, people who think they don't have much of a chance, or who don't want to try, are more likely to join Steemit. But they are also, perhaps, not likely to be the best poets, or the best judges of poetry. So we could end up with what @jessandthesea mentioned, where she worries the winners of poetry contest on Steemit "give Steemit a poor reputation as far as poetry is concerned."
The worrisome dynamic is clear, right? Alternatives to mainstream reputation-allocating systems are likely to attract sub-par members, thus gaining a poor reputation, thus dooming them further. And this is the case even if the mainstream system is somewhat broken, just like in the US educational system.
Ok, that's the negative part. But why am I here? Obviously this cannot be the whole story. Why am I writing? What's the positive part of this?
Steemit as Australia
There are a lot of ways to make excellent content, whether that content be tutorials, fiction, novels, poems, or what have you.
Many of these kinds of content, however, might not be recognized by central reputation-and-reward-allocating institutions ostensibly devoted to recognizing them. So for instance, I used to work in academic philosophy. To get into a journal of academic philosophy, you have to write in a very peculiar way. An incredibly peculiar way. You have to have a particular mind-numbing tone, if I can put it that way.
So at some point, I noticed that blogs that I liked--like Slate Star Codex--had philosophical entries that, despite containing jokes, clever wordplay, and so on, were just as rigorously argued as mainstream philosophical works. And often were about more real issues. I think one hundred years from now, it's much more likely that a historian searching for influential works of philosophy will grab something from SSC than from any academic journal.
So the mainstream philosophical system has failed so completely, that there are forms of excellence that can grow up outside of it, that it can scarcely recognize.
I think this happens all over the place, not just in philosophy. I've read some damn good fanfiction that, because it was fanfiction, could never be published. Calling something "fanfiction" would bring about sneers in literary parts. But I think there are possibilities implicit in fanfiction that normal fiction cannot attain, or can only attain with difficulty, and that mainstream fiction loses out on a bunch by ignoring them. (Although in this case, it's legal issues principally which explain why these cannot be published commercially.)
I see Steemit, then, as a place where you can, er, let a thousand flowers bloom. Hopefully. As Australia, by being isolated from a big chunk of the earth, had a chance to evolve many very different beings that are nevertheless excellent in their own way, hopefully Steemit could do the same for humans, while providing remuneration of some kind for the best.
But Who Knows
So new, weird institutions can fail because they attract weird people who are bad at things, on one hand, but can also attract weird people who are good at things in a way they aren't rewarded-or-remunerated-for by mainstream institutions designed to do that.
Which of the above two factors predominate in the particular case of Steemit, depends, really, on how broken you think our institutions are. If you think our normal institutions, designed to reward and provide reputation for the creators of excellent content, are pretty good, then Steemit is probably a bad bet. On the other hand, if you think our institutions are utter crap, and Google is grabbing enormous rewards that could be better claimed by individuals, or something like that, then Steemit... might not be so bad a bet. If we have sufficient external systemic failure, Steemit might have very good chances indeed.
Or at least that's the way it appears to me. Still learning. Now I just need to learn to understand how some people are making money with bots, and shit content, and whether or not this is a systemic or temporary problem. If I've made any horrible mistakes in the above, please let me know, thanks!