The only difference will be instead of pursuing whales for upvotes, everybody will be pursuing everybody.

I think that's a huge difference. But for me, I would not use the word "pursue". Sure, that's one strategy. You can try to pursue everyone for upvotes. Instead though, I would rather use the word "attract." That's how it works on all other social media sites, right? On YouTube, the most successful users do not pursue other YouTube users for likes and views. They create content that attracts users. I think there is a key difference between "pursue" and "attract". Currently, to make money on Steemit, you don't need to create content that attracts many users. You just need some rich users to support you.

They will be people with 500 account whose sole objective is to upvote

As far as I know, it's already difficult right now to just create 1 account. I can't imagine creating 500. Plus, there are ways to make it even more difficult to create dummy accounts.

there will be people who would expect you to upvote them because they upvoted you

Sure, but that's how it is already now. That will always be the case no matter what. With the current system, you can make lots of money like that. But that won't be the case if all votes are equal. Again, think of YouTube. Those who play the "scratch my back if I scratch your back" game won't make much money. To be successful, you really need to attract a lot of followers.

People would rather upvote their friends than upvote strangers

With the current system, my vote can be worth a lot of money. When it comes to money, I would rather give it to my friends than to strangers. This could be different if all the votes are the same value. Or it might not be different. But one thing is for sure. Nothing changes if the system doesn't change.

The issue with steemit remains the money factor. Remove the financial value of votes and see how calm it would become.

Well, the money factor is the whole point of Steemit. So if we remove the financial value of votes, how do we decide who gets how much money? Because if we completely remove money, there is no reason for Steemit to exist. We can just all go back to Facebook, Twitter, Instagram, etc. In other words, saying that we should remove money altogether from Steemit is the same as saying that Steemit is a failure and we should just shut it down.