Equity in the system is going to have high volatility regardless, because that's what equity does. As economic conditions change and more importantly sentiment about future economic conditions changes, equity values fluctuate a lot.
Ned Scott may have been right about SBD increasing the volatility of Steem (although, I personally don't recall him saying this and I'm also quite sure that it was widely understood so even if he did, it wouldn't have been any great insight), but he was completely wrong about trying to combine a utility token with a currency.
He said in an interview that he thought Steem would be improved by simplifying the token system by having fewer tokens, and threw out the idea of removing SBD. Afterwards in the comment section he made the point above that the existence of SBD inherently made Steem more volatile.
This is from my memory, I searched for the actual interview when I was writing my post but I haven't managed to find it yet.
The former I remember. The latter is entirely plausible, but was common knowledge. I'm pretty sure Dan Larimer posted about the same thing much earlier.
In any case, my main point, more relevant to the present, is that expecting an equity/utility token to function simultaneous as a currency is a bad idea. The two functions are fundamentally in conflict.
Yes, I'm totally in agreement with that. I think it was one of the major innovations of Steem at the time that was somewhat given up on, where the default among cryptos is to try and have one token that is simultaneously equity in the system while also being day to day currency and/or store of value.