I just love the merit system and new ranks because it gives equal opportunity to every member of the forum to show their skills by posting high quality posts.
I believe that the merit system not only creates equal conditions for writing highly qualified posts, but also radically changes the established hierarchy on the forum. Now its not enough to be a high rank user to enjoy the respect of other participants. Personally, I look at the number of merit first of all. And I think many others also evaluate this indicator. Now the rank itself doesn`t mean anything: if it`s not confirmed by merits, then trust in such a user immediately falls and his account begins to cause suspicion. We see a huge number of hero and legendary members who aren`t able to earn at least 1 merit, but on the other hand we see users of lower ranks who have proven that they really benefit the bitcointalk forum. A new elite is being formed at the forum, the foundation of which is not activity and rank, but merit-recognition from other members of the bitcointalk community.
I largely agree with you, Direwolve735; however, I will still quibble a bit with your various conclusions..
I would assert that merit remains one additional indicator, besides other indicators, to look at yet there can be a variety of reasons why ongoing activism on the forum may or may not result in members receiving merits, so I would be careful to ascribe too much weight to merits, even though ongoing receiving of merit does become an additional factor - especially to show that a member is active and that the member (especially if earning a lot of small number of merits from a large number of users) has gained some respect from other forum members through their ongoing participation in the forum.
Of course, there are some members (such as Satoshi) who are no longer active, but received a lot of merits for historical posts, and even though the vast majority of merits seem to get sent for current active posting, there are some merits that have been distributed to historical contributions and it is likely that such distribution of merit for historical posts will continue to take place (at least on a smaller scale), which also does seem to be helpful to identify respect for some historical contributions or contributors (even if the member might no longer be active - or even dead).