TL:DR Every improvement in my mind requires likely coding that the forum isn't capable of.. most of my issues with the system come from what will gain you exposure over just merely helping.. the types of content you create will be more heavily weighted on specific topics (and maybe rightfully so). Theres things I like about the system and things I don't like.. like many things it comes down to whats right vs whats fair.. and based off of the position you are in currently, you'll be swayed to one side over the other.
Things I like about the system:
1) Hard merit/activity curve, maintains value for getting these ranks and limits competition.
2) Eliminates spam/useless posts, since they don't help you in any way.
3) Rewards early adoption.. simply being in the right place in the right time is the most important thing in life, and this system heavily rewards that to its earliest users.
4) Level up system.. makes the competition of working through the ranks feel rewarding.
Things I don't like about the system:
1) Early adoption outweighs hard work.. a user could be the most creative helpful user on the forum and it would take 2 years to reach activity goals even if merit goal could be reached uncapped early on.
2) Merit system tends to be an example of the rich getting richer.. longer users on the forum who dabble in more advanced topics tend to receive more merit than their newer counterparts.. if certain areas of the forum are weighted more heavily as far as content goes, why even have sections that are viewed unimportant?
3) Topics/infographics or things with more exposure get heavier weighted (I've seen as much as 50-100 merits gained from one post.. I certainly can see more than one.. but 50 merit points is likely 1000+ posts for people who don't heavily post in bitcoin related topics or don't create posts and merely just respond to others).
Observations/Biased Opinions:
1) I think activity should be thrown out if Merit reaches next requirement before activity.. but then people could exploit passing out merits to rank a person quicker (Activity isn't a good indicator of good posts, just more an exploit management system which penalizes new users).
2)I think merit should only be used for people below legendary.. but the system requires Legendary members to dish them out as a sort of trickle down economics. (I don't like this term but I can't think of another way of describing it).
3)I think certain areas should be monitored more often like "For Beginners" section and places noobs feel more comfortable talking.. but most merits are given out in Bitcoin related technical topics that the people who need the most merit are least likely to participate in.
4)I think there's way too many merits given out for people creating posts to farm merits over merits rewarded for helping people and answering questions. (This is probably because helping people isn't as noticeable as creating posts...especially in noob heavy sections).
To wrap things up I do think the system is working and as much as I don't like certain drawbacks for me specifically, if I was in a position of power the things that could maybe be improved on may be more limited by what the forum coding is actually capable of.. even things that I would consider changing for the sake of fairness would maybe not overall serve the forum better... Its often an issue with most political topics to choose between what is right, and what is fair.. and your forum rank, early adoption, and time spent reaching these ranks will often sway which side you stand on.