I am no economic expert, but I don't think the current system is inherently flawed. It actually seems quite well designed to me. It absolutely strongly favors the holding of SP as intended.
I think the problem is how we seem to instantly think in terms of monetary value, viewing steem as a currency, when the vesting system really sets it up more as shares of an enterprise. If a stock splits 3-1 it's not considered to have undergone 300% inflation. The climbing amount of steem is more akin to a continuous controlled stock split I feel. With a vast majority (I think the white paper says 90%, though I don't recall) of new steem being paid out to SP and SD holders, the inflation rate is drastically lower than it appears. SP basically has an insane interest rate that is counteracting the "inflation." The value of steem could actually fall forever, and as long as it did not exceed the rate of new steem produced, the market cap would remain unchanged, and that's the real value to watch.
Participation in the platform is what mitigates the the effects of the inflation as rewards are earned. Those who will be most negatively impacted by inflation will actually be the passive investors who simply buy steem but do not participate, as well as those with holdings in liquid steem.
Back to the stock analogy, no one is losing any value until they lock those losses in by selling. The vesting system really seems to be a far different beast than bitcoin, which functions much more akin to a true currency.