"My question is this first, is speculation and investment the same thing to you?"

More or less. I guess I more associate speculation with high risk investment, but in this context what I mean to say is that I can identify five main reasons that people are buying in atm:

(1) Buying/holding steem speculating that the price will rise in the future (also not wanting the two year contract so they can bail all at once if need be)
(2) Buying steem and powering up speculating that the price will rise (and willing to take on the two year contract b/c their vests will appreciate in terms of steem)
(3) Buying steem and powering up because they want to game the curation and earn profits
(4) Buying steem and powering up because they want to buy influence on the platform
(5) Buying steem and powering up just to participate in voting

More than one of these might apply to someone, and obviously I can't imagine all the reasons people buy in, but I'd wager that this covers most.

1-3 are speculation/investment, i.e., expectations of getting more than they put in, so I wouldn't consider them sources of revenue for long term sustainability.

4-5 could be considered revenue but my issue there is I don't think it will be nearly enough. My reason for that is buying in now affords you basically no voting power at all unless you're willing to put in a lot of money.

And vests will continually get more expensive in terms of steem as time goes on. They're almost 300x more expensive than they were when the network began, and after a year of network lifetime they'll be 730x more expensive than in the beginning.

I could imagine some people with decent money potentially putting a lot in to buy influence despite this, but for the average person I don't see what they have to gain.

So I think there needs to be another major source of revenue to be able to afford continued reward payouts.

"Also, Steem inflation is supposed to be counterbalanced by the fact that most Steem is locked up as vests, plus the fact that dilution from SP holders also goes into payment of rewards, or can be calculated that way."

Vest holders are guaranteed to be compensated at a better steem/mvest conversion rate when they power down vs then when they power up, so that's supposed to act as protection from the dilution resulting from reward payouts. In reality though the value of what they can power down hinges on how much liquid steem hits the market.

Locking up 98.6% of the newly minted steem does greatly mitigate the effects of inflation, but it all really depends upon how much steem is powered up vs. how much is powered down. Right now there's about 4% of the supply which is liquid. In the graph above the net power ups start dipping below zero as time goes on...one of the main reasons is because of that increasing steem per mvest ratio used to compensate vest holders with more steem per vest when they power down. The same number of vests powered down across the network every week would mean a progressively greater amount of liquid steem hitting the market each week.

The ~1% / week maximum for powering down is small but across the whole network it adds up. From August 13th - 19th it was 243,000 steem hitting the market (excluding the 687,000 for the Steemit account). That's a 4.6% increase in the liquid steem supply, 17.6% if you include the Steemit account.

Assuming that the network continues for some time with the 40-50% power down, and assuming similar power up patterns, the liquid steem supply will grow faster.