The bad of them really do out-weigh the good.
Bad: Ego's are boosted which can lead to major favoritism in some cases, good, decent people having their threads ignored at times. I've seen it all before, and it's a sad thing, really. ;/
Too much negative karma can be considered abuse, and can make people feel bad when they MAY not have done anything, or maybe they did, but for some reason people keep karma smiting them, (biting) which isn't fair or right. ;c It also may encourage spamming. Just because it happens already DOES NOT MEAN you should encourage it, and I see ranks and karma as a case of encouragement to spam. Spam does NOT EQUAL ACTIVE! It just equals annoyance. It clutters up a forum and makes it look unprofessional. We don't want that, no? :3
Good: It can bring a forum to LOOK active, but like I said that is mostly due to spam posts, which shouldn't be acceptable in any sort of case. ~ Maybe showing who did good on a post would be when someone gets a bit of a karma + boost, but again there's the possibility of karma going DOWN which is a Negative effect, not desired, really.
While it would be a shame to see them go, I think it would be in the better interest of the community if they did. Or, just make the ranks all the same. At 0 "New Member" and anything after that can be considered a "FH Member" so everything is fair and simple. (;
And @Red; I mentioned it because I get the feeling you do not take this subject quite so seriously as it should be taken. My apologies if I confused you, dear. ^^;