I believe the merit system is fine, but merit distribution isn't fair. A lot of replies are ignored from getting merits. General users aren't very interested in spending their merits properly. Only merit sources aren't enough to keep fair merit distribution at all. So I think the systems should be improved, though I don't agree fully with Vod. We somehow need to increase merit circulation. It's become very hard to rank up for new users unless he is a scam buster or something similar.
I am not sure how to improve it, but I have an idea. Currently, if we send merits to someone, he is able to send them to others, but the ratio is 1:0.5. This means there is a system loss of 0.5 merits. We can improve it to inspire the merit sender. Let's say I send 1 merit to Vod, so Vod will have 0.5 spendable merits. The rest of the 0.5 spendable merits should be added to my account. So I will be more interested to spend my merits. Because when I am sending merits to someone, I also am benefitting from it. That's how the merit ratio will be the same; source merits shouldn't be considered for getting back. Only earned merits should work this way.