The issue of "watering down" one's GPA by taking more classes is already being significantly addressed by colleges and high schools.

Most top colleges examine unweighted GPAs rather than weighted ones. Unweighted GPAs cannot be watered down by non honors classes, and have better predictive validity for college grades than weighted GPAs. One might be inclined to think that this provides incentives for taking easy classes, but the top schools are simply not going to take you seriously if you adopt this strategy (speaking from personal experience at a top liberal arts college and having seen the data on the average number of AP classes taken).

On the high school end, many high schools (including my own former school) have switched away from a weighted average system for class rank. Instead, they use a system where one's GPA for class rank purposes = 36 * (unweighted GPA) + .5 (number of honors classes taken) + 1(number of AP classes taken). The additive system prevents the possibility of having one's GPA watered down. Some high schools go further by adding additional points for taking extra classes beyond the number required for graduation, further encouraging the taking of additional classes regardless of their honor/AP status.