The main issue, the same problem you would have if every bank could print their own money.

If any site could issue karma and Karma was accepted at many sites and redeemable to goods you would habe a major problem with the value of karma.

Unless the sites were issued a fixed amount of karma that they could in turn give to their users.

The exchange would be used to determine the relative value of karma from different sites - like a currency or stock exchange. So if you wanted to track hacker news karma with karma from reddit someone would have to be willing to trade with you, and they could set the exchange rate (i.e. 2-1, 1.63 to 1 etc).

Heck, I'd just settle for one ID that works EVERYPLACE.

But back to the Karma...Yeah that would be neat.