At first glance it sounds like a really bad idea, but an interesting one nonetheless. If it's a small close-knit community I imagine there'd be no problems, and probably no one being banned. But on larger boards it has the potential to get way out of hand. As long as the admins are keeping a close eye on it it'll be neat to see how it works.
I'm guessing members can only spread reputation so much per day so that they can't just gob someone with karma all at once?
Yup.?
Users can hit ten people a day and can only hit the same person once every ten times