Truth be told I don't understand why it's that's high. 15% of Steem's inflation is supposed to go into this, and Steem has less than 10% inflation, so I would expect the APR to be less than 1.5%.

Yeah, this is far from obvious. Took me a long time to noodle it but it did eventually make sense:
https://www.palnet.io/steemleo/@preparedwombat/3vs4h1-the-steem-power-you-earn-for-holding-steem-power-revised