The formula seems to be there to balance bandwidth share among everybody. Would this kind of thing happen in a bit torrent procedure as well? In my head, I like to compare Steemit to bit torrent and Bitcoin.
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Bit torrent has seeds and Steemit has Witnesses (dedicated servers).
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More Bit torrent seeds means faster downloads.
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Less seeds means slower downloading.
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Therefore, too many people on Steemit, by that logic, would result not in a limit but simply in a slower transaction speed in posting, voting, and everything that you want to do on Steemit and in Steemit. If Steemit wants, they can make Steemit go slow like Bit Torrent goes slow when there is a lot of more traffic than usual.
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Yes, that seems to have been the logic. However, it cuts in suddenly rather than slowly decreasing.