You nailed the biggest risks.
So, what's all this discussion about? This wasn't just word vomit, I promise I do actually have a point. To generalize: perhaps we should be more careful with rewards. With a high price of steem, and newfound influence of the middle class, one could be quick to think that everything is fine and dandy. However, with the new ability to reward only our friends or ourselves with all our influence, we run a great risk; if people focus on the reward rather than the engagement and community building, we could quickly collapse into a self-serving, reward-leeching scenario.
As linear rewards also mean voting for oneself is easy and profitable: a true tragedy of the commons will occur if everyone only voted for themselves "because that's what everyone else is doing". Quality will degrade, and efforts will focus not on providing value, but rather on extracting reward. If this happens, we are likely to see another steem bear market, as a new fire cleans out those not soley here for reward, once again. To prevent that, I believe we now need altruism more than ever.
There has to be an element that rewards altruism and also rewards getting other people to agree with you.
RE: Which came first, the Engagement or the Reward?