That's just the way it is, and I think it's a good way to use the merit system. Merits are more than just a thumbs-up or a like; they're the mechanism by which people rank up here, so giving them to someone who already has enough to make Legendary might be considered to be squandering those sMerits.
Note: I'm totally guilty of violating what I just wrote, many times over. But as a merit source I've usually got plenty of sMerits to hand out. *And speaking of that, I think I'll now get back to my extensive waiting list of members wanting post reviews*
Edit: Shitsky!! I didn't realize how low I was running on sMerits, and I just handed out my last one while doing reviews. If anyone who's still waiting for a review sees this, please be patient as I have to wait until my source allocation gets re-upped. *eeek!*