The Mahatma, please don't quit.
The point system is a good thing, because while there are still exceptions, the general trend will lead to better playing. Besides, people are addicted to points, and we've had a renewed fervour in Diplomacy, now that the incentive to play is so much more tangible. The point system is not a downgrade, and even if it makes no noticeable difference in certain issues, at least it appeals to many players who prefer having a tangible incentive, and the motivation and expanded community is priceless.
In the end, it's the little hiccoughs that make the games worthwhile. It adds a dynamic aspect to the game, and really, playing out the cards your dealt is half the fun. That's the reason some people like getting the more "difficult" countries.
TOgilvie, I have been entertaining this idea for a long time now, but the main problem is that it's VERY difficult to find 49 different, active players. When I organized the Masterminds V tournament, I probably got about 15 applications, and at that point, I figured that a tournament of 49 is still a ways off.