I agree Insanolord is a wasted vote, but I'm not sure where you get the logic that Insanolord is a dead man walking. He has no activity to play, no lever to pull because of it. That inactivity benefits Mafia because it's one less target they need to consider for today. Unless Steefo is Mafia themselves and got ahead of their skis.
Unless I'm reading this game wrong, which is a very real possibility, Maxi stated this in the opening post:
Insanolord has been infected by the T-Virus. He can not die tonight in any actions but he can not use their role or vote. They can post and PM though but no votes. Since he hasn't voted so far if the vote adder doesn't use their role on them Insanolord will be out of the game come Day 4.
The only person who needs to vote is Insanolord
So as far as I can tell, unless he is saved by a power role, Insano is a guaranteed death come Day 4. Voting him out now wastes a vote since it accelerates a certain conclusion and provides a free lynch to the mafia. In fact, with that in consideration, I'm not sure why Steef decided to go against Insano here, albeit for a different reason than what you've provided.
Perhaps Lucario/Steef/oohhboy makes sense. Then again, ShyGuy hasn't done much of note this game either, and the earlier Strongman target could have been a false flag if mafia was aware he'd survive it.
Bah, this game confuses me.