I agree with some of this, but not the part about steem benefiting if another social project brings the masses in. Steem isn't steemit.com but for all intents and purposes, it really is. If steemit.com dies, which it likely will when a better run project with hundreds of millions in backing comes along ( which one is btw in less then 2 months). I don't see how that will possibly be good for steemit, and in turn, steem.
It will steal whatever user base is left here, thus causing those here to sell and get what they can, while they can. Which will put things into a downward spiral that will not be easy to come back from.
Eventually the price will bottom out and something of value could feasibly be built on steem, but it will only get harder and harder with a much lower price of steem and much lower market cap and lack of visibility and resources.
I mean we have had trouble funding a decent project on here with steem prices over a dollar for a long period of time, what chance is there with prices sub penny?
And don't forget about the witness pay coming in steem... but their costs fixed in dollars... a very low price of steem will cause issues there as well.
So, you see, the clock really is ticking on steemit.com and in effect, steem.
I'm sure some people would sell. But let's imagine some other blockchain-based social media platform managed to tap into a torrent of new users. That would not be possible at all without convincing the general public of the benefits of decentralization. The beginning of mainstreaming would mean that there would have to be millions or tens of millions people enthusiastic about decentralization. That would mean the idea of decentralized content delivery including social media would have to be extensively covered by mainstream media outlets. Lots of articles comparing various decentralized articles would be written. Steem as a platform and Steem apps would be covered, too.
Let's assume a decentralized social media platform gained ten million active new users. If Steem were to gain only 1% of that, that would mean 100,000 new active users. We have maybe around 15,000 active users at the moment. Even a small piece of the pie would result in massive growth. Even if a half of us packed up and left, the number of the people leaving would be dwarfed by the newcomers. Another decentralized social media platform going mainstream would create so much positive news coverage in the crypto space that it would most likely result in a massive influx of speculative money. Cryptocurrencies tend to be highly correlated assets. The success of some will lift all the boats in the big picture.
This is why it is very important for projects on Steem not to rely on the price of the coin to fund anything. Digital collectibles is one area where the chances of relying on direct fiat funding are good.
But I do agree on the point you made about witnesses relying on STEEM price. That's why it's vital that MIRA gets rolled out in the near future. It will be much harder to withstand much lower STEEM prices or to scale without bringing the cost of running a full node down.