Good questions:

1. I could see keeping rewards the same size they are now.
2. it is easy to predict content with 0 value, hard to predict content with high value. It is also easier to manipulate low-value predictions for accuracy because it requires less total Steem Power. It seems clear that predictions below a certain threshold should not count toward your reputation. You can still earn rewards for making those predictions. As a bot you could predict everything to earn $10 and be right some fraction of the time. It may be the case that there is no value in predicting low-value payouts. Either predict high or go home. I would say that predicting things that would claim more than 0.1% of the daily rewards. In other words, predicting the top 1000 posts each day will provide the most value to the readers.