You can't draw a linear correlation between amount of cards and value of cards. A card will lose value through other factors too, not just quantity. You should be aware of plenty of very strong cards in high quantities which are higher valued than rarer cards.

In the end adding new cards will have a negative impact on cards it is superior too, yes, but it just as well might push the price of other cards through new synergies. In the end, more options are better and I highly doubt that every new card bought is financed through the sale of older cards and even then there is a small benefit through market taxes. Much more likely more money will flow into the ecosystem.

And yes, it goes to the ecosystem due to the nature of the proposal. Everything above the payment to the SPL team goes into the DAO. Eventually the rewards have to be financed somehow other than printing SPS and while we look forward to less sale pressure on the SPS token we all should be aware that future rewards have to come from somewhere.