Very helpful post, but I think you are neglecting something in the explanation that would be helpful to me. Isn't it true that setting the max and min prices for Steem Dollars still doesn't protect the value of this debt instrument in the black swan events you describe.

Let's take the case of Steem becoming worthless, this just means my Steem Dollars will only allow me to get a maximum price = SteemSupply / (10 * SteemDollarSupply). This maximum price could be paid to me in a bunch of worthless Steem that I can't exchange for any useful amount of dollars.

Unfortunately I'm having a hard time conceptualizing what it means in the other direction, but I suspect a similar issue is at play in reverse.