My questions are:
I like this. Even though I think the rule should not be changed, I like this thinking outside the box.
My personal view on point 3 is that, if a user is really being destructive to the community, I would like to see that user punished more severely.
However, the system works since it can be used for that, because a more aggressive moderation of a user would lead to more frequent bans and hence longer bans.
Thus if a user is being harmful to the community, the frequency of bans will satisfy the need for stronger correction (as it leads to a longer total ban length over a series of bans).
Having said all that.... sniff... I still think the best way to help a turbulent user is through encouragement and big brother type PMs and help.
It's what was done for me and I am very thankful for it, I think this kind of practice should only grow.