It does seem this is largely overlooked. The math on a high sec gank used to be that it was profit if what dropped was worth more than what you burned to make the kill (leaving aside time cost like ratting to keep sec status up, etc.). All that a bounty means is it's profit if what you burn costs less than 120% of what you killed (more or less; considering that the bounty is figured on the total value and not just what drops, it will be somewhat more than a 20% "bonus" on most bounty ganks). I don't know how the math is going to work out in practice, but it doesn't mean that it suddenly became profitable to go around popping noobships in your Tornado just because someone has a $36B bounty on their head.

The real problems seem to be things like the fact that they missed a huge opportunity for taxes and fees to increase the ISK sink effect, and there are some outright exploits like gankers aggressing each other first, in order to collect their own bounties off each other.

It also is just silly looking when every single person is running around with a stupid WANTED tag hanging off their ship. At least make it so we can set a threshold so this tag only displays on anyone in space (including on our own ship), if the bounty total is above whatever X amount we specify.

Others have already suggested stuff that would fix what problems the system has:

(1) There should be NO payout to anyone, and no reduction of the bounty, if CONCORD is involved in a kill. If CONCORD does even 1 point of damage, then it should not be a bounty kill. This completely solves the ganksploit.

(2) There should be appropriate nonrefundable and probably pretty steep commissions on bounties, that get added on top of the amount you post. Ten or twenty percent seems fair as a starting point. A trainable skill to reduce this by half at level 5 would also be fair.

(3) Bounties should never be refunded, even if the person or corp is deleted or disbands. If you drove them out of the game, then you got what you paid for. Any bounty pool on a deleted character or corp should just go into the big black hole of the ISK sink. Yes, this does mean people can make "bait" corps and toons just to attract and flush bounties. Every playstyle is valid in EVE.

(4) There should be a limit of exactly ONE bounty you can place at a time by default (since you can't retract them, and you can't place another until the first one is fully paid, you need to think hard about who to put that one marker on). There should also be a skill that, like Contracts, would let you place up to 20 at level 5. If you rely on bounties as part of your personal security plan, then this will be training time well spent.

(5) You should be able to "buy off" your current bounty pool at any time by paying exactly 5x the current outstanding amount. The impact on you is the same (you take a loss 5x what was posted), and it makes some sense that you ought to be able to bribe the Bounty Commission or whoever it is that we imagine runs this for about 5x the amount that was posted. It also means that the economic muscle of the two sides to a bounty war "matters." So you can go on posting 100m on me all day long, and I'll keep buying it off just to spite you, because I can. We'll see who goes broke first.