Because there's no method of recycling karma from people who have left the community, there must be a source of new karma that will allow new members of the community to take part in the community.
Since the only way of creating karma is to answer questions, this means there must be a constant stream of new questions sufficient to provide karma for all the new people.
But new technologies aren't being generated fast enough to provide a constant stream of new questions that can be answered easily enough to generate the stream of new karma required.
So we see duplicate questions being answered instead of being marked as duplicate because answering them creates karma but flagging them as duplicate doesn't. Only the existing moderators, who have "enough" karma, care about flagging duplicates.
That's an interesting point of view for the "karma economy" angle; I believe there's always enough karma sources, or rather there's always ways to create them if the scope of the site is wide enough.
I would push the idea a bit further and introduce karma destruction. To me, the most useful way to destroy karma points is to introduce a karma-based site subscription; that is, one subscribes to the site in order to read/write it but there is a constant fee of N karma points per day. User contributions are tipped with karma points taken from the upvoter/downvoter's karma pool. Eventually, one may let user buy free access (but not karma points directly otherwise it becomes a plutocratic system) in order get some support money.
They already award some karma for doing those stuff but its a very small amount and it sometimes has a cap (IIRC, you only gain karma for your firt 500 edits)
Another option would be for karma to evaporate over time. You'd have to stay current, and if there simply wasn't enough fresh content being produced, then relative rankings would renormalize over time.
Because there's no method of recycling karma from people who have left the community, there must be a source of new karma that will allow new members of the community to take part in the community.
Since the only way of creating karma is to answer questions, this means there must be a constant stream of new questions sufficient to provide karma for all the new people.
But new technologies aren't being generated fast enough to provide a constant stream of new questions that can be answered easily enough to generate the stream of new karma required.
So we see duplicate questions being answered instead of being marked as duplicate because answering them creates karma but flagging them as duplicate doesn't. Only the existing moderators, who have "enough" karma, care about flagging duplicates.
So we end up here, by design.