I also think they might have miscalculated the amount of interest in investing into steem there would be, which probably has lead to a faster decline than anticipated.

Nobody wants to lock their coins for years in a contract. In crypto things move too fast. And most people don't trust altcoins enough to commit for 2 years on an unproven model.

I think steemit team has been thinking too hard on this project which is why there is a lot of complexity that serve no real purpose. Maybe they wanted to differenciate themselves from other crypto too much, the idea to pay bloggers with the mining rewards and the free transaction with graphene was good enough in my book, no need to go try fix problems when there is none, that's essentially what the inflation and the lock time period does.