Only prob is this assumes bots cannot simply make new accounts using anonsteem to start carousel voting.

I remember when fyrstikken had this cool bot that "upvoted all new accounts" to "help users". He went around asking whales to support and delegate sp to it because it would "help minnows so much".
But at that time he was buddies with noganoo and noganoo had a bunch of sockpuppets. I always thought it was a but odd that someone who threatens to kill others, ruin their lives and hire people to beat them up would be "so for the people"...and this is i suspect why he was promoting it.

So this solution as i see it (unless im missing something) just gives them incentive to say "now your delegation will make us lots more money on all these fake accounts we have joining steem. The circle jerk needs to evolve though".

I do not think reputation systems should be on the chain itself. In fact what should happen is that different sites (like busy for instance) should set up their own reputation systems that use blockchain data.