To clarify, it would be priced per 1,000 Karma, you don't need to sell whole units of Karma or blocks of 1,000 Karma, it just limits the number of decimals. You could purchase or sell 0.00001 Karma, subject to the minimum transaction sizes on exchanges, which I believe was something like 10,000 Karma last time I checked on Mintpal.

Although this will help the price (in the medium to long term) it is more about turn over and market flexibility.

The downsides are as follows:
1. People may think it is a second attempt at reverse splitting Karma (rehashing a cancelled idea) because it has the same benefits. It is better for topics to be handled once then left alone. I note however the majority of people were in favour of the reverse split but it wasn't done due to technical considerations. This suggestion alleviates many concerns of those that do not want the reverse split. It is actually a very different suggestion, we aren't reviving a cancelled idea.
2. People may get confused when they see "KARM" trading at 1,000 times its last price and in their joy may not read the amount of BTC a sale will give them. It will be up to exchanges to make this clear in their announcements of the change or a new listing. A mistaken transaction however should be reversible (ie rebuy straight away, hopefully only at a small lose). People with large amounts of Karma will be more careful. Given how large the change is (a factor of 1,000) I don't think many people would make this mistake. To decrease the chance of this I suggest actually making the new listing called KARMA instead of KARM.
3. If people don't understand the benefits they will consider it to be a gimmick. You will have this with practically every change made.

Another implementation option available for Mintpal is open a new KARMA/BTC market with the "price per 1,000 Karma" system and leave the old KARM/BTC market (no A after KARM) there until it becomes disused and eventually the joint listing will be removed. The third option of course is just to cancel all orders and make the change. For your reference the first option was to migrate old orders onto the new system.

Realistically, I see it as more of a new exchange leading the way, gaining market share and other exchanges following the way they think is most reasonable.

I brought it up now because if the x11 transition is a success more exchanges will be interested in Karma and more people will be trying to get Karma on new exchanges. This is far more likely to happen before Karma is listed on exchanges than after.

I am of course in favour of the change.