It does not undermine the system. They have chose to sid on the sidelines with the repuration malarkey. They choose not to lose from it and not to gain from it (not that there is any gain).
Rep doesn't change anything. Most users that have red rep are consistently bad posters; regardless of their rep, their post is kinda gonna suck. MOST OF THE TIME. However, occasionally, someone could make one mistake or disagree with the general opinion, and their rep could go down the toilet. I've personally found the rep system to be mostly underused, anyway. Most people don't even think about the rep system when judging a post.