I said it's both. But in the design of an economy that increases its monetary supply over time (like all real-world economies), they rely on growth to not have tremendous indvalidation of their currencies. This is exactly what hasn't happened here.

Okay, and such tremendous invalidation is a benefit to no one. It destroys the existing investment and also destroys the resources available within the community to actually build (or even sustain) anything.

If we aren't growing enough to more than offset the cost of 7% inflation (and we clearly aren't, since we aren't really growing at all, and pretty much never have apart from a few short burst secondary to price spikes), then 7% inflation is too high. It makes a lot more sense to preserve capital until such time as we can fix the growth model, rather than waste it.

Indeed, what little of a growth model we have seems dependent on favorable price action. All the more reason to be skeptical of continually flooding the market with new coins.

Why not at least use this empty (but valuable) space to promote good Steem / crypto projects, curate great content or whatever

That's under consideration. It is potentially an added benefit from the use of the space, but there is also very little evidence that "Trending" is a true growth driver (or valuable), despite the claims being made here (your implied claim included). In fact, it is mostly a leaderboard and something that some Steem insiders care about a lot about and the rest of the world not so much. It is perfectly fair for investors to vote to take a gain in lower inflation (burnpost) or a better-functioning stable value coin (sbdpotato, and also sometimes burnpost) over a prettier trending page (and also fair to vote the opposite).

Another excellent bit of market evidence that Trending space is not worth much is that no one has ever been willing to pay (e.g. bidbots) much of a premium to trend. As a thought experiment, if I were to auction off the space in the burnposts, how much do you think I would get? All evidence suggests, to me, that it would not be enough to even be worth the effort.

IMO trending prettiness is just not that important. Feel free to disagree and vote accordingly though.