I'm not going to think of every downside (most have been mentioned already). I think one significant downside is that there will be abusers. User A will create alt accounts B and C, and have those spamming while he gets to report them accurately. He can do that repeatedly, and gain sMerits without doing a single post. Then, he can spend these sMerits to alt accounts D and E.

The forum is fine. No need to make it work more complexly. But good attempt.