Worthless as an indicator of poster quality. Priceless as an indicator of how well a demagogue someone is.
Don't get me wrong, I'm not saying people with high reputation are not decent members. I haven't gotten to that degree of self-loathing yet. It's just that the road to high reputation does not go through quality posting. It goes through playing to the crowds. Saying what the people want to hear. Low brow humour. Witty retorts. Criticism of Turbine. Criticism of other (preferably well known) forum members. Most of my reputation came from the things listed, instead of my actually helpful and informative posts. You entertain the crowds, they shower you with greens. That's all there is to it.
I'm glad it's going away. If it were up to me, we wouldn't have visible post counts or join dates either. All of these things are just distractions from the actual substance of the discussion and often contribute to prejudice.
There is one thing I liked about the reputation system though, and it was the ability to leave a message for that specific post. Simpler and quicker than a direct message, and cleaner than a +1 to the thread. That is one functionality I'd like to see them preserve if possible.
Sounds about right.
Regarding your last paragraph: I wish that had been encouraged and the practice of people posting "+rep!" discouraged (the latter to the point of being infraction-worthy, perhaps). I never understood the need some people had to publicly announce that they were giving someone rep - just click the little rep button, leave the comment there, and be done with it.