I don't think it is waste for Legendary. They receive 0.5 sMerits per 1 received merit. Then they could distribute it to other members, someones even help junior (in general term) members to rank up. I see this type of initiative mostly among Legendary members. That is a very good think. And some of them are really knowledgeable and no wonder they get more merits.
Regarding those 0.5 merits being useful for junior members, they will still remain useful if they come from a lower rank member. It makes more sense to allow merits for low rank members only as they need it. However, this idea of stopping merit points for legendary members will result in one problems. Some of the campaign managers have started the criteria of having some amount of earned merits for higher payout. No if merit points are discontinued for legendary, they will suffer because of this or the campaign managers will have to change the rules for this rank again.