How do you measure the value it is likely to generate?

It's an opinion but a question I ask myself in forming this opinion is how much would any for-profit (or even sustainable non-profit) web site pay for like content, and then adjusting down for the fact that we don't directly generate ad revenue and most of those other sites do. For things like personal blogs, non-remarkable photography, routine (often mass produced by the same few posters) travelogues, the answer is very little, certainly not $50 per post.

my blogs with $5 rewards are unlikely to bring $5 in return for the community in ways of exposure. But do my posts need to be downvoted then as well?

Maybe in an ideal world, but I don't personally have time to pay attention to those. I can definitely see the clear imbalance in many high payout posts.

Also, I'd argue that wide distribution of small amounts of rewards has it's own value in keeping people engaged. But a high concentration of rewards to a few posters without much of a following doesn't do that. That's another reason to nudge down the high payouts. Not everyone is necessarily aware, but the way the Hive reward pool works mechanically, any rewards reduced from high payouts by downvotes goes directly to increase the broader small payouts.