It incentivizes curators to maintain the level of SP which is profitable to them.

The average of which is negative. Nearly all high SP users have gained most of their SP by mining it in the spring and summer of 2016. We are talking also about why anyone would buy large amounts of SP and not just not power down if they have a lot of SP.

Of course people will start powering down at some point, but that doesn't mean they will power down everything. The more SP you have, the more responsibility you get and the short term profits shouldn't matter so much to you, you have to care about the community more and about the health of the whole ecosystem, as this will be more profitable to you as your stake increases.

Without speculative bubbles there are no long-term profits.

The question is also about incentives to power up. If it is profitable to power up at all only because there are high SP users who behave altruistically, that model can't be sustainable.

For Steem to be sustainable, paying for Steem Power with fiat must enable the payer to gain access to fiat revenue streams. Paid commercial promotion does just that. Remember the photography contest example where a camera manufacturer buys or more likely rents Steem Power to be able to reward the contestants. If priced right, paying for SP can be a financially rewarding proposition under that scenario. This, in fact, is the actual value proposition of Steem according to the white paper.

If don't see clear signs of growth in the number of users in the years following HF21 and acceptance of paid promotion and advertising on Steem as a way to fund it among prominent stakeholders, I will power down and sell everything at the peak of the next speculative bull run and never look back.