May I ask what the point of the merit system is to give to legendary members? Doesn't that just reduce the supply for everyone else making it even harder?
Not at all. Merit is not given out or transferred. Only sMerit is given out (giving sMerit means that someone will get both merit and sMerit, and you will lose sMerit). The supply that matters is the sMerit supply, not the merit supply. The reason legendary members get merit is so that they meet the requirement for their rank.
Your points are only valid if they are seen and "merited" by a select-few members of this community.
"select few" A few hundred thousand members of the community got sMerit, not just "a select few".
Doesn't anybody else see the mile-long list of potential issues that may arise from this?
Issues, yes. Mile long, no. Perhaps you could enlighten us and list your mile long list of issues.
How do you tell how many sMerits you have to give? Do you click into that +merit link on the side of the post?