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There are a number of issues with the system you proposed.
One issue is that a bronze player that beats an Elite player would win the same amount of points as a bronze player that beats a silver player. That seems inherently unfair to me.
Another issue is one of inflation. If you can always win 5 points when beating a player of a lower rank regardless of how far below you they are than the top players will continue to grow their point totals unbounded. This means that the number of points a given player has ends up being less related to their skill than it is to the number of people who play Disc Jam. As a result, it would be impossible to set thresholds for the various leagues that function as intended and skill ratings would end up being large meaningless numbers.
For more information about rating systems, you may want to read the Wikipedia page about the Elo rating system[en.wikipedia.org] as a starting point. There are a lot of factors to consider when selecting a rating system for a game. Other potential rating systems include variants of Glicko or TrueSkill.