You said: "Steem doesn't have real world applications yet."
The problem with your analysis is that you observe this phenomenon through only one single piece of the puzzle: the Steem.

Truth is this project is very different from any other digital currency.
You have one application the social network (Steemit) that provide real value to people (same way than Reddit or Medium) and Steem is the vehicule that will incentivize people to produce and curated good content.

But to understand how it is possible you have to take into account the relationship between Steem/Steem Power/Steem Dollars because indeed there is 3 not only 1 currency.

Here is a nice explanation of how those 3 currencies work together:

hope that helps,
cheers