Actually, I love the karma system. It really makes you think about what you post. And again, Verbose has summed up my entire complaints and celebrations of it in a masterfully written TL;DR. We salute you.
The major problem I find with it is yes, posts with +50 get upvoted even more, while posts with -20 get buried away. No one reads the actual content, they just follow everyone else.
Especially worse is when something is at +/-1. That first point either way makes all the difference. People are hazardous to go against the first few votes, and it is very, very unlikely that something that is +/- by only a few points will swing the opposite way. That's why I often upvote posts that are at -1 or -2, to give them at least a chance.
Exhibit A
You would expect everything to be downvoted to hell, but no, after a person (GASP A MOD!) started the racist pics, it kept on going, and everyone got + a bunch. If only the first guy did a -1 on that mod who shall not be named's post, none of the rest would have happened. But since he got +15 for it, other people figured, why not, and so that very day Verbose got very offended and crawled in a corner to hang his little head. Karma whoring at its best.
It was pretty funny, I'll admit, but if 1 person got offended and downvoted, I'm sure everything else no one else would continue in fear of being buried.
EDIT: LOLOL This was the thread Verbose referenced.
But still, this is the best system I've found on a forum. All I'm calling for is a bit of reform.
The Nine.Five Theses on the Improvement of the Efficacy of Karma
1. Make karma an expendable resource. No more infinite a day. You have to pick wisely who you're going to use it on.
2. Limit the amount of times you can give someone karma a day
3. Limit the amount of karma new members can get out a day.
4. Have some sort of system where you can level up or something and hence, get more karma
5. Make it so accounts with the same IP cannot give karma to the same posts
6. Make the +/- buttons less prominent. Having them dark red against a white background screams "click on one of us!"
8. Make the entire system less prominent. Right now, it's pretty much the first thing you see when you go to someone's page. It's pretty much a competition of who can get the most karma.
7. Once something becomes too negative, close it to karma. -50 is enough, anything else past a certain point is meaningless.
9. Limit the application of karma. Not everything has to be subject to it. No more karma on wall posts (because those are supposed to be personal, not a huge popularity forum).
9.5: Make it 2 clicks to +1 or -1 something. That extra second makes a huge difference.
And so I nail my complaints on the metaphorical church door of KYM.