I, like Justin see this as an issue of public vs private (personal) property. Justin argues it is private property.

Private property is a legal designation for the ownership of property by non-governmental legal entities.[1] Private property is distinguishable from public property, which is owned by a state entity; and from collective (or cooperative) property, which is owned by a group of non-governmental entities.[2][3] Private property can be either personal property (consumption goods) or capital goods. Private property is a legal concept defined and enforced by a country's political system.

https://en.wikipedia.org/wiki/Private_property

It is taken from here:

Private property cannot exist without a political system that defines its existence, its use, and the conditions of its exchange. That is, private property is defined and exists only because of politics.

So let's imagine that Steemit INC is registered in the USA and controlled by the laws of the USA. The corporate entity Steemit INC was legally transferred from Ned to Justin accordingly.

To continue, we should replace "country" with "blockchain" because a blockchain is not a country.

That means the witnesses or Steem are bound to the laws and political system of the blockchain and not USA or some country.

I would argue that it is up to the political system of the blockchain to define personal/private ownership vs. public/collective ownership.

Since the Steem government is the consensus witnesses, in theory, they are the judges administration and legislation. They rule the Steem realm as an oligarchy or narrow republic.

Steemit Stake has been determined to be 'collective' or 'public'. This is not unprecedented or unexpected.

Worries about the sale triggered 'exercise of state authority'.

You are right, should they be able to rule? I think as the chain becomes more decentralized we should take away some rights, or add more consensus witnesses. However, that's hardly the discussion to be having now when doing this will make Justin the sole authority to determine the ownership of the Steem that has been determined as 'public property'.

(edit: forgot the essential first "," after I >.<)