One thing I noticed is that there is a lot of talk about penalties based on Karma, but I'm not seeing any talk about penalties being based on Karmic deltas, or whether the target has (recently/ever) flagged PvP. Your MaxKarma character who never flags PvP is likely going to be your peaceful player who is most inconvenienced by being PvP targeted, so it makes sense to discourage these by making them much more risky: They will be less experienced and much less of a challenge, and as such will be the kind of PvP that should be most discouraged (i.e., ganking).
A -10,000K(arma) player who kills a 0K player who has also engaged in PK activity in the last (x) days/hours/minutes should have a much lower sentence than a -10,000K player who kills a +10,000K player who has never PKed. Perhaps the engagement in PvP would count as, for example, an additional 2,500-5,000Karma difference.