I also wish you were wrong, but sadly you are quite in agreement with the math, and my own assessment.

The downvote pool is based on SP, and adds 25% of extant SP worth of flags to the power of the account. Almost all SP is presently in the hands of whales, and by using the exponential increase in value of their SP, they capture almost all rewards, ~90% of rewards now go to whales, and this is while rewards are linear. The demonetization of posts by downvoting returns the Steem upvotes have assigned to the post to the rewards pool, where whales can again have a chance to extract it via their stake weight.

EIP is essentially demonetization of non-whales. It will be catastrophic for social media.

Thanks!