In this case, I have no problem with the current rank system. The only "privilege" for Legendaries, in this case, were the 1000 auto-generated merits every Legendary got when the merit system started (in contrast to the 500 Hero merit points), and this one only was an one-time benefit.
Does this mean grandfathered-in accounts received these points during the creation of the system but those just getting to Hero or Legendary won't necessarily receive the same points?
You can look up the concept of
grandfather clause on wikipedia.
The general grandfather clause idea is that if there is a change in a rule, the new rule will go into effect, but old members will not be adversely affected by the new rule (which means that they are grandfathered into keeping the benefits that they already received); however, in this case, this new merit system would be a kind of hybrid-grandfather clause because under this new merit system all new members are abiding by the same merit rules even though the older members are able to retain the rank that they already received and further all older members had received a one time airdrop of merits that was based on their rank at the time that the new system was put into place.
Even though it is possible that there could be airdrops of merits in the future, this merit system is not designed in a way to anticipate such additional airdrops of merits but instead seems to intend that all members (no matter what their rank) receives additional merits by receiving them from other members rather than by any additional airdrops nor from admin.
Of course admin has discretion to do whatever it wants in terms of giving additional airdrops of merits for any reason or no reason, but as far as I know there is no evidence that any additional merits have been given to any members beyond the initial airdrops of merits on January 24, 2018 (and then a one time correction a few weeks later that went to some hero members to receive an additional 500 merits as long as those particular hero members had reached a certain level of activity as of January 24, 2018 (activity level of 775 or higher, I believe?).