Because steem has no fees and there is no "tax" to speak of it encounters the same problem all other coins have. Investors will seek to maximize their profits and as long as the system's code allows them to they will do so.

It's just a roundabout way of going about it is all, and it's damaging to the perception and growth of steemit and the steem economy because ordinary users pick up on the behavior of these bad actors and know that steemit is not really a meritocracy. Regular users want to know they are one among many whose vote results in an article or piece starting to trend upwards, they want to add comments and their own creativity when re-blogging, they don't want to have to play strange minigames when tagging their posts, they want to be able to feel like themselves and feel relaxed in an environment where people shouldn't really care too much if you're being offensive to the sensibilities of the receivers (at least to a degree).

So instead of attracting users who genuinely engage with content and use social media for fun in their free time and tapping into the largest potential userbase, we are left mainly with two (really one) groups of users, those who want to earn income from steemit and have invested or have the potential to invest a lot, and those who don't have much income in the first place. To make it even more clear, I'm saying there is a reason that steemit attracts the kinds of users it does, and it's highly segregated into the haves and have-nots, and the composition of the groups are a very telling indicator of the health of the system. If it were not for outside speculation forces outside of our control we would not have seen the price growth or the user growth that we have, because user growth correlates tightly with the former, and has little to do with the "quality" of the content here.

Practices like egregious auto-voting and circular-voting stifle the competition and draw attention and funds away from more deserving content, but it's not like anyone on steemit really cares what is said, they just set their voting trails to autopilot and know others will do the same for them if they have enough voting power. This guarantee of income really damages the incentive to strive for greatness when the poster knows they can get away with middling or mediocre content and still receive a large payout.

You know the problem is bad when, upon investigating a decently large SP lender here on the platform, I happened across a message from a beneficiary complaining that other recipients of SP delegations had been abusing the power of the circular vote by posting without disregard for content. I'd like to think that there are others who feel the same way as this person does about being a part of such voting groups, but I don't think many are going to so openly question an opportunity to generate such huge profits on the bare minimum level of effort needed to not get the attention of some of the larger downvoters.

Steemit has to disentangle the notions that you can force large investors to actively post on the platform to generate returns and the idea that we can be bigger than the mainstream social media websites, because the current model simply does not work and will not achieve those dual goals. Make steem and steem power a more attractive passive investment in its own right (there are many functions they utilize to achieve this currently, but they are inefficient and require time investments that many larger investors will not bother with, they have better things to do with their time, and it's doubtful they will want to spend the majority of their time maximizing returns from what is but a sliver of their portfolio), and make honest, active posters and community members feel like they are on a real social media website, not a business or workplace slash pseudo auction house and lending institution.