That system will be easily abused especially by account farmers who had hundreds of account. The reason why theymos choose to limit sMerit and carefully selecting some members as merit sources are to prevent such abuse. It successfully halts the account farmers but also creates a new problem: other genuine members having a hard time to rank up. I agree with your opinion, the merit in circulation right now is simply not enough in my opinion.
sMerit availability has been increased by ~50% to 17650 per month. Was ~12k previously.
https://bitcointalk.org/index.php?action=merit;stats=sources