There's no point in having a trust system if people are just giving negative feedback because they're mad at each other. And if the only punishment someone gets is a retaliation with more negative feedback that doesn't have anything to do with trust or trading.
But this is exactly what happens very often, I've seen the trust war go down and it's not pretty for the forum or for the users involved.
Light brings up a very good point about the inherent flaws of a trust system that's moderated, how it boils down to trusting in the moderators rather than the community as whole. The latter is very much more in line with the spirit of open-source, peer-to-peer, etc.
I personally think that one solution would be to simply make the trust system a little less noticeable on people's accounts. I mean, in the trading forums, people should be able to easily look up the trust record of another individual, but perhaps if putting negative trust didn't generate the 'red mark' on an account in any area of the forum, it would be less used as a weapon of dislike.
Like I mentioned, I suffered from the red mark one time in the past when tradefortress took an issue with me. Because he was on default trust at the time, I had to wear a 'trade with extreme caution' scarlet letter for a while. This was despite the fact that 1) I had never traded with TF or anyone else on this forum 2) I wasn't involved in trading. In a sense, the scarlet letter didn't really hurt me since I wasn't a trader, on the other hand, it was an embarrassment. In my own case, TF turned out to be one of the biggest scammers known to our community, so in that sense, I was justifed.