1) New members are also making detailed and to the point posts to earn more merits. This is improving the quality of posts on this forum which will bring more traffic and advertisers.
Making detailed posts is not equal to making meritable posts or vice-versa. Improving the quality of posts is not related to bringing traffic. If I recall correctly the biggest source of traffic for this forum is the bounty campaigns and not the legit discussions.
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2) Some people tried to cheat the merit system by giving merit points to their alt accounts. Most of them got identified and were punished. Thus, the merit system also helped to find out alt accounts here.
It was an indirect effect of the merit system. Quote
3) Merit system is also good for the companies having signature campaigns here. There signature will appear on high quality posts now.
Thats what ruined the forum. 
I don't think merit is the best way.
You have something else in mind? Do enlighten us on your idea.