"Isn't it a lot more probable that outside investors stayed away because they saw that the main value proposition is not working, and an economic system where those who have much can assign even more to themselve can't grow organically?"

Definitely...

"The crypto ecosystem owes the Steem blockchain and the STEEM token a nod of appreciation because it built one of blockchain’s first tangible real-world use cases, a decentralized social content platform. The years have not been kind to the platform, however, with clear flaws such as the manipulated upvoting of content and power disparities between users becoming increasingly apparent. As a result, many users have opted to switch to other platforms like Medium."

Source: https://bravenewcoin.com/insights/steem-price-analysis-engine-in-need-of-a-restart