Here is a conclusion that can be drawn from all the posts above.
Cons
1. People work harder to spam and then report them at the same time to earn merits.
2. Someone said "we can award merit to top reporters" but in that case, spammers try their best to be in the top.
Pros
1. Most pros ultimately lead to cons.
With the above being said, I think it might be appropriate for someone who is fairly active in reporting who is struggling to rank up due to a lack of merit to receive sufficient merit to rank up (maybe without the corresponding sMerit, or less than the normally expected amount) as a reward for helping reduce rule violations, which is ultimately what merit is trying to do.
I think the system is just fine the way it is. Everyone here is impatient, but we're not quite 3 months into it yet. It's going to take some time to wear these spammers out.
I agree with most of the thought that system can be easily cheated by the whole new concept. It will only lead to the wastage of resources and previous approach to stop spammers.
I thought for a while that it will be good but after discussing the matter with all of you, it is clear that there will be more cons than pros.
Thanks for participating.