From skimming over the Steem whitepaper, from what I understand, the SBDs produced should adjust to the Steem price over time. The system should be self-correcting, but I guessing due to the rampant bull market we are in, the self-correcting is slower than the price action.

The issue is the scarcity of SBDs which should correct over time as the supply grows. Sure, we'll see these swings, but over time the volatility should decrease unless I'm misunderstanding something.