There's a lot to unwrap here, but since you took the time to lay it all out, I want to address it all.

EIP:
Is the economic stability of steem any better off with the EIP as of today? If the answer is well of course not but all crypto is in the tank, then the EIP is still a miserable failure because it has done nothing to separate STEEM from any of the other crypto-coins. EIP ='d Economic Improvement Plan. So far I have not seen any improvement in the economic stability of Steem.

So the main purpose of the EIP wasn't to increase the price of Steem, it was to stop abuse. Or at least what most people considered abuse. The major players being whales that delegate all their stake to bidbots, whales that break their stake into tons of smaller accounts and upvote themselves in a death by a thousand cuts sort of way, and farmers that that milk the reward pool by spamming thousands of worthless posts and upvoting them pennies for a macro large return. This sort of thing was also really difficult to track and stop in the old system.

The EIP combined with the separate downvote pool pretty much killed all of these. This doesn't change the fact that a large amount of Steem is on exchanges and is being traded as a mechanism to get a return like almost all cryptos. That's why everything moves w Bitcoin, it's just traders playing that game, it has nothing to do with what's going on here when we see these large total crypto market moves.

The money not being used in the SPS isn't going anywhere, if anything it has the opposite effect of what you're suggesting because whatever is locked up in the SPS isn't getting sold. Also the SPS is decentralized, if the stakeholders aren't excited by what they see, things won't get funded. Personally I've supported several but truth be told, nothing that's been proposed has me insanely excited, and I'm not outraged that the things that had their funding removed had it removed. I'd rather we had some stuff being worked on rather than nothing, but meh.

Whether people like them or not, downvotes are a critical part of the system. Without them, this entire thing would just be a cesspool of abuse. Period.

The reason Communities will make this situation better is because it will fracture the community, which needs to happen. No one person or even group of people will have the bandwidth to go through every single community and downvote people for no reason. Also, people will be able to launch their own tokens within their communities. You mentioned Appics, they have APX and it has value. As long as the project can maintain token value, the users don't need to be rewarded in Steem, they can just be rewarded in APX. If you use Appics much you can see quickly that a lot of those users will never cross over to the blogging/Steem side of things. They are exclusively using Appics. With the introduction of SMT's I think this will be the trend going forward.