Good discussion. I was alarmed when the idea was proposed. But after some discussion, became convinced that it was the wiser course.
The scale protects SBD against the inflationary pressures put on it when the Steem price drops. There's no way SBD can maintain it's peg to the dollar when it becomes such a large portion of the market cap. The market pressures must find equilibrium. This will require ether offsetting the market ratio of Steem/SBD or a drop in the purchasing power of SBD (which results largely in the same thing).
The main downside I see is that the additional Steem puts inflationary pressure on the currency. But, IMO, it's the better course because it works to maintain the SBD peg to the USD.
If Steem goes up, the opposite will occur. We'll see the pressure on SBD go upward. But we haven't experienced that since before that last spike to almost $5/Steem.
Before this formula was put in place, SBD was dropping down to around 75%/USD. After the formula came out, it's returned to the 90s, so it's apparently working as intended.