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tom.stoer said:it is exactly this, namely that up to now nobody is able to explain what string theory fundamentally IS.
No one knows, but there are always speculative answers and this is a rich field for bullgarbageting.
Tongue-in-the-cheek answer: this big blob of theories that one sees to emerge ist just the set of consistent quantum theories that include gravity. And "string theory" is just the proper way to parametrize it in special regions, analogous to "gauge theory" (if one decouples gravity). The question about a fundamental theory of strings would be on a similar footing as the question about what underlies gauge theory - this may be just an ill-posed question.
Of course the hope of most people is that there is a) some underlying theory whose vacuum states are given by the big blob, and b) on top of that there would be some dynamical mechanism that would weigh differently or select certain vacua. But there is no reason for a) and b).
I personaly like the idea as explained above, in that the big blob is like an abstract topological manifold M and any local quantum theory, one writes down corresponds to choosing local coordinates on M. The choice of origin of these coordinates corresponds to the choice of background around which one expands perturbatively. This does not at all mean that the fundamental object, M, would be meaningless and arbitrary, it just cannot be globally be described by local QFT. The fundamental theory, if it exists, would be some coordinate-free and thus some kind of topological theory without any local degrees of freedom.
This ties together with what I said before: there are no more elementary local degrees of freedom than we already know. Going up in energy does not reveal any new stuff. Still there exists a fundamental theory, and choosing a vacuum state produces an infinite amount of local degrees of freedom by expanding around it. This abstract underlying theory may or may not have any non-trivial dynamics.
This abstract pre-geometric theory is, I guess, similar in spirit to what the LQG people aim for. So I don't see here a fundamental disagreement.