As far as I know, Admin doesn't want non-Mods to see who's banned or not. Years ago, a Mod gave me a list of banned users as seen from his Mod account, and later asked me to delete it again.
Admin works in mysterious ways.

Banned accounts, inactive accounts, accounts from died people are all deserved to receive merit for all good posts they have ver made before bans, deaths or dormancy.
Maybe, but I personally find it useless to send merit to any of those accounts as they can't send merit back to other members, meaning its wasted.