With the current number of cheaters, farmers, and abusers... Yes, it is flawed. If only Merits that was given to the shitty accounts can be removed, I guess it will be necessary to call that the Merit System is a success.
You will always have these people everywhere. You have to design your system to protect from them accordingly. In my opinion, we may see more changes in future to the merit system in order to combat the techniques used by these abusers currently.
It is nice to see good posts here especially the ones concerning the improvement of this forum after the merit system.