Vermithrax]Sounds really interesting actually. The lowered crafting abilities are irrelevant IMO because you could just buy top tier shit off of other people with your ill-begotten loots or kill people and take it. However, does lower tier training facilities mean that your toon will be disadvantaged in abilities? If so, that's super ghey. You're already going to be zerged, but now you have lowered abilities too? Same thing as stat loss IMO.
I guess with the ability to lower/raise your reputation you just want to get your toon trained up before you go on your killing spree.
There's other things not mentioned in that section about all the different ways to "declare war" so that you can PVP certain groups. The entire blog is lengthy but a good read. They have some interesting ideas, even if they are coming from Tork Shaw.