Yes, trusting the relay to figure out who my follows of follows are is not ideal but sending lists of 10k npubs isn't ideal neither. But actually not terrible if we can avoid doing so too often, so the relay could cache that list so the client can use list references.
"elevating the role of relays" isn't directly the problem if by "role" you mean "efficiency" ;)
* So a relay that's good at *not* showing me spam would get paid to show me less with a very diffuse criteria of what constitutes spam.
* A relay that's good at finding all the posts of a clearly defined, huge set of authors would get paid to show me more with a clear criteria of what's of interest.
