He doesn't need to personally nit pick every case, or really any, but by setting a comparatively very objective standard for leaving a negative rating the VAST majority of conflict is simply avoided.
There will be no hindrance of stopping scammers, but in fact it will be easier to spot them as they don't blend in in a sea of red. Also people will feel more comfortable contributing to a community where they don't have to worry about everything being taken away over some petty squabble at any instant.
I agree with this, the more people adopt this system the more it will balance itself. Initially it might appear a Cats vs Dogs drama, the more people adding their trusts/distrusts the more our personal "reputation" would form based on objective observations from the community. I might be able to plot with a bunch of people against Cats for 1 month, maybe 2/3/6 months, but the real value of cats and dogs will come out overtime. Personally I woudnt even give power to any DT level indeed: the sum of someone Trust would then come out based on the entire community feedback. Scary? Behave then...
Then again this is biased.
Like in every situation people are more likely to speak up if they had an issue, or for the matter a trust breach, than a good experience, or say a trust proof.
The score average would be deeply negatively biased.