On paper it sounds like an awful idea, just because of the report thing.
They should just worry about obvious troll accounts spamming porn and shit, or people being extremely virulent, and you don't need a complicated system for that, just a janitor type role that doesn't ALSO double as user.
That said, annoying people like Red Mercury without the constant boot of the mods to protect them, wouldn't be as annoying, as long as you can call them out, so in that sense it'd work better than Era.