Totally disagree.
> (1) It increases administrative burden. This increases the workload of IMMs.
Yes and no. You're not necessarily asking imms to spend more time watching people; you're just lowering the threshold of what is deemed "reward-worthy". That's not much more work for them.
> And when IMMs fail to reward as "expected", players are unhappy.
Absolutely this is true. Players are also unhappy when you tie mechanical advantages to objective things like observation and exploration xp, because it creates the incentive to grind.
> (2) It increases envy of successful (edge-earning) players. When IMMs reward some player, other players are unhappy.
Does edges-for-PK not also result in envy?
> (3) It reduces predictability of a character build.
True.
To me it's a question of incentives and rewarding people for things that make the game better for everyone. Chief among these being role-play an generally not being an asshole. That is, the things that are likely to get you imm exp.
I also think we should incentivize legitimate exploration and observation, i.e. newbies exploring (and observing) things they've never explored (or observed) before. But that needs to be done extremely carefully so as not to create a scenario where vets feel compelled to grind.
I'm actually pro-incentivizing PK as well, but again, I don't want to create a scenario where the guys who're capable of 200 kills are obscenely rewarded. They don't need incentives to PK. The guy I want to cater to is the person who's tempted to just "opt out" of PK entirely because he's scared of dying, or doesn't think he can compete, etc. I'd like to motivate that guy to get out there and give it a try. So, I'd reward the first few PKs and then nothing after that. Maybe the first 10 or 20.