You make very good points.

Sadly the way that I see it, the Steemit platform mechanically encourages cases of users to engage in either self-upvoting or circular up-voting.

Imagine you're a whale with a 100% capability of adding $50 to 'something'. Powergaming the system would require either self-upvoting or voting for another whale with similar or better power - with the unspoken accord of scratching each others' backs.

I'm not saying that this is what happens - but I suspect that it does. It makes logical sense by my limited perspective (a non-self-upvoter)