The displayed reward level may not increase but the market value for which those rewards would be trading on would indeed go up if you reduce the supply.

You missed the point on this. If all rewards are being burned, then rewards paid out for self-voting schemes and other abuses is certainly not increased!

In order for rewards paid out (and not burned) to increase on net, the STEEM price would have to increase by proportionately more than the amount burned. For example, if 50% is burned then the STEEM price would have to double just to maintain the same payouts (much less increase). If 75% is burned then price would have to increase by 4x. I find all of this reasonably unlikely given that STEEM has a market cap of roughly a billion dollars and something less than one million dollars per day is being paid out. There will likely be an effect on price, but not disproportionate with the amount burned.

Also, since you mentioned market value, the market value of SBD plays a role and this initiative seeks to (most likely slightly) reduce SBD value by 1) dumping 100% of the SBD rewards directly onto the market, and 2) increasing the supply of SBD by increasing the STEEM price.

Remember, rewards are paid out both in SBD and STEEM/SP, so both market values matter. So if the initiative increases the STEEM price while decreasing the SBD price, that may have no (or very small) net effect on the overall market value of rewards.

If your premise is that high paying posts attracts abuse you have also recognize it attracts legitimate use as well

My premise (and FWIW it isn't really mine but mostly originates with other stakeholders who have expressed it, though I mostly agree) is that the rewards are outsize from what added value the Steem community can actually, realistically contribute to the platform, in terms of attracting users, creating content that promote itself, building brand value, etc. There are other limiting factors besides money, notably time, community size, and good ideas. (To say this another way "throwing money at a problem" is often extremely wasteful.) By contrast, abuse has no such limiting factors and is easily scaleable to absorb whatever extra money speculators throw at it. This also has the negative secondary effect of making abuse more frequent and pervasive which actually damages community morale and brand value.