Drying out the supply of HBD would make the issue of >$1 HBD worse because supply/demand.
The idea of rewarding HBD, as a stable coin, is one of the best things about the original design. Read what Dan had to say about that: https://hivel.ink/steem/@dan/steemit-s-evil-plan-for-cryptocurrency-world-domination
HBD holds its value at $1 fairly well when it's not being blindly speculated, because there is a constant supply and it can be converted to about $1 worth of HIVE. The 10% haircut rule has made that not hold when the price of HIVE has been too low and that is another thing being looked at for a change.
You are right that there is a flaw in its implementation, there is no HIVE->HBD conversion to keep the peg on the upper end of $1. I've advocated for this as a fix for HBD and formerly SBD for a long time now. HBD as a functional stable token is (or will be) one of Hive's greatest assets. Thankfully others are coming around to the idea: https://hivel.ink/hive-102930/@blocktrades/proposed-hardfork-change-to-stabilize-hive-dollar-s-tracking-of-usd-value
Now that's something I can get behind and only just scanned over it so far. These posts seem more like a band aid slap while the proposal seems like more of a permanent solution. If we can actually get it to stay within a cent or two of $1 at all times that will do wonders. I just didn't feel this post was the way to go about it at all.
Using posts and even the DHF to increase market HBD supply is not a do-it-all solution by any means. We can see that in its limits currently. The true solution is to allow HIVE->HBD conversion by the blockchain.
Even if it's limited, I do enjoy the bandaid. Redirecting capital from people blindly speculating on a three letter token they have zero understanding of back into the value of HIVE and the DHF is proving to be very successful. And due to the fact that has only been partially successful in its mission, it strings that dumb money along resulting in more value for Hive.