It is just that merit is used to make this forum to have quality posts.
You are right on that, is merits system is another way building forum user confidence in given that motivation and encouragement that your doing things rightly, for me I do feel more better of when a merit source merit my post it makes me to strive more harder in learning and making a meaningful and helpful post in other to gain more merit, merits is more like an excitement and flavour added to the system, the merits system also has a away of sustainability of respect as per hirachies, like the different ranks, the adoption of the merits system is very much ok.
The purpose of the merit system is not to discourage ranking up, rather it is to discourage spamming. I have read that the level of spam in this forum as at 2018 was very much. It was so bad that some people even decided to leave the forum because of large level of spamming. With the present day forum you will understand that the merit system has done its function and it is still doing more. Many people and including myself complain that it is very difficult to end merit. I am beginning to realize that it is fine that way, if merit is that easy to earn, it might not be able to serve its function again. All we need to ask for is fair circulation of merit among different boards and local boards. As I have always said that no system is perfect but the bitcointalk merit system is effective.