Well, we have had that model for close to 3 years now and have failed in attracting and keeping any major content creators, and this is during a time when some of the more popular ones have been outright looking for a new home due to censorship issues with youtube etc.

I agree with you that would be the ideal model, but history is showing us that model isn't working.

Regarding the modest ad revenue. I can't really say for sure what that revenue might look like, but when I plugged some simple numbers in for general advertising revenue based on our user metrics, generating a couple million per year should be pretty simple... then if there is some more targeted advertising, those revenue numbers go up. Increase our user numbers and those revenue numbers also go up.

Regarding steemit.inc needing to keep all the revenue, remember, getting 50% of something large is better than getting 100% of something small. :)