While I see steemit being favorable for those in the niche cryptocurrency market, it doesn’t seem to add practical value for the majority of individuals for whom it would be far easier to link their bank information to their social media account and withdraw their earnings directly from company that operates the social media platform.

In that model how to you evaluate subjective values of posts? The idea of using the blockchain is that processing all of the social transactions happens as part of a decentralized system that's made specifically to encapsulate the social capital of those interactions in a cryptocurrency. Even if you decided to let people cash directly out to fiat, you still need a way to be assigning valuations to interactions on the site, and for that a blockchain ends up being the simplest and least centralized mechanism available for that.

Then there's the benefit that social sites, microeconomies, and by extension cryptocurrencies all rely heavily on network effect to succeed, so by baking them together it makes for a pretty potent combination should the community continue to grow.