The only thing that annoys me about the SR system is that so many people put such a huge focus on getting their SR up. They will just pull over and let you by because they're "just racing for SR". That just seems pointless to me, shouldn't your SR be based on how safe you are when you're actually racing people, not just running laps by yourself? I have gotten to A 4.99 just fine without farming SR. I am much more concerned with increasing my iRating than I am about my SR, the SR just kind of happens when you're trying to get good finishes, it does no good to wreck yourself out of races. I just wish more people would just race hard and clean and stop focusing so much on getting that number up at all costs, I think it dilutes the actual racing a little bit at times.
After almost a year with iRacing though, I am convinced that the SR system is pretty good. Its not perfect, but in most cases people seem to be more respectful of other cars on the track because of SR. If anything, I think the SR system is TOO easy on people, if it were tougher to get the higher licenses, I think races might be even cleaner up at the A/B level. I realize iRacing wants to make it easy enough for people to race whatever they want though(and thus buy more content), so I don't seem them making it harder any time soon.