Quoting Eliezer:

One of my ever-pending posts to write is on what sort of simple interface might prevent online arguments from retracing the same points over and over. I suspect it will not be graphical with boxes, because that makes poor use of screen real estate. I suspect it will not have lots of fancy argument types and patterns, because no one really uses that stuff. I think it does need to have a karma system, because otherwise there's no way to find the good stuff.

The basic rationale is filtering; the current system is satisficing, given some reasonable assumptions as to how online communities work, and has the "feature" of being inherited from a successful web site and thus being a "proven solution" rather than something speculative designed from scratch.

The major issue with LW's current karma system is information cascades; that has been acknowledged almost from the start of LW. Yet solutions intended to correct this have not been widely adopted.