That seems flawed though as well though....
Imagine one person gets: 1st, 2nd, 1st, 2nd, 3rd. Another gets 3rd, 1st, 2nd, 1st, 2nd. Now, one of these people is bound to lose over the other purely because of how many people submitted demos... It doesn't seem right.
I don't think there's a perfect system. The weighting based on number of demos submitted, however, takes things like difficulty of the map. It evens the field a bit more for people who don't submit demos every week. The best system would be to determine an "optimal" best case time for each map, then award points based on how far off the mark each person is. You would have to curve it to fit all of the outliers, and clearly this method would involve a good bit of work to standardize an optimal time. You could also fit the curve to fit the number one time (as opposed to a true "flawless" run), but everything has bias