if you have, say, better than 90% accuracy in reporting spam or rules violations then you will receive a merit for each new report submitted (as long as it is accurate, of course).
Merit farmers will create a few thousand sockpuppet accounts, create multiple spam with each sockpuppet account, and then use their main account to report all their own sockpuppet spam. Voila, instant 1000 merit.
Easy enough to stop that by limiting the number of posts that can be reported each day. And how is this any different from what is going on now, especially in the foreign language subforums, where there appears to be big ol' circle jerks of meriting?