Pretty much agree with everything you said. It is a helpful clarification.

You could even build some very fancy apps using a combination of escrow, multisig and the hierarchical nature of the key structure of steem along with the secondary interpretation of data that "soft" consensus brings.

Yes and indeed it may indeed be possible to prove this is entirely as powerful as any native smart contracts (for example, with appropriate bonds and penalties to require that participants take the actions which the 2nd layer has determined should be taken).

However, I still argue that allowing simple smart contracts is preferable because that is what many developers want. Give them alternatives with cost, etc. advantages (carrot), not a lecture from the #80 chain on how their whole approach is wrong (stick) and they should abandon everything they think they know about decentralized applications because we (supposedly) know better.