If you read the original interview, that is not what was proposed.
The proposal was that valve looks for patterns in server population associated with particular users, so, if one guy logs on, and he attracts 30 people to the server because they want to play with him, he is rewarded for that. Meanwhile, if one guy logs on, and five people immediately disconnect because he is a spiteful jerk, he loses voice chat priveleges...
This method of analysis is self balancing, because users don't have direct control over other players' reputations, and the guy who would get upset and want to downrep someone in revenge for being beaten is the one who other people are less likely to play with.