sMerits limit for given day and limits for each user can be good way to balance merit rating. If the idea behind merit system to promote community and quality post then limits will be the ideal way.
I believe that merits should be awearded singly with the limit of one per user per post. Members should be able to award any sMerit they have, even if it is all of it in one day, and posts should be able to receive multiple merits provided they are from different members. This is the best way to gain peer ranking of posts in my opinion.