You have a very good perspective on this. Yes Steem dollars earned on Steemit used to buy Steem or Bitcoin are "free money" but if you buy Steem with your own dollars or Bitcoin then it is not free and quite risky. That last part can't be said enough. Now for Steemit, I would not say newbies are late to the party, but it will be harder for them get the attention of upvoters now that there is more content than there was at the start of the party. As for Steem dollars, I personally am not using any Steem dollars to purchase Steem or Steem power. I use it for Bitcoin. You don't have to be like me, but it does give a person the opportunity to diversify (FOR FREE) into Bitcoin. If you fully understand that option you will not pass it up. My latest Steemit post is here: https://steemit.com/steemit/@bitcoinmeister/yours-network-a-steemit-competitor-that-will-use-bitcoin-sneak-peak-and-links-included