Capping the daily payout means other proposals wont get funded

That's not what has happened. A few weeks ago when there was another proposal competing with the stabilizer, funding for the stabilizer was temporarily cut until both could be funded.

Given the roughly 10000% per year return (non-compounded), it's actually very questionable whether any other proposals make sense given the current economics. There is a good case they should be put on hold while the opportunity to use budget for that kind of direct return for Hive stakeholders exists (which likely won't be the case indefinitely, so the other funding would likely get restored in time), but again that's not what is happening in practice.

Finally, calling it a "pump machine" is not quite accurate. People on external exchanges are pumping HBD, not us. As long as they are doing that, the mechanisms within the system allow us to channel that demand into demand for HIVE and value returned to Hive stakeholders. We're doing Hive stakeholders a disservice if we don't.