It also relies an a healthy USD-LUNA market. If there aren't any buyers on the LUNA side it doesn't matter how man LUNA you can mint from your UST because you can't exit the LUNA side anyway.
It's the same problem for basically any stablecoin: they exist because the paths between traditional finance and crypto are narrow and tricky. But this in turn limits the ability of a stablecoin to actually peg to a value from traditional finance. If there are mass net outflows from the cryptocurrency ecosystem back into traditional finance it will be impossible for these stablecoins to maintain their value. They are essentially a bet on the downside of crypto (if everything goes to custard you won't be able to exit) with none of the upside of crazy returns found in non-stablecoin cryptocurrencies.
It's the same problem for basically any stablecoin: they exist because the paths between traditional finance and crypto are narrow and tricky. But this in turn limits the ability of a stablecoin to actually peg to a value from traditional finance. If there are mass net outflows from the cryptocurrency ecosystem back into traditional finance it will be impossible for these stablecoins to maintain their value. They are essentially a bet on the downside of crypto (if everything goes to custard you won't be able to exit) with none of the upside of crazy returns found in non-stablecoin cryptocurrencies.