I think Zed30 is right, users can't get to sr member rank to grant karma if they have negative karma, which is ideal.
I think the karma limiting by time works better than by quantity and time personally. It drastically reduces karma abusive but means users can still grant enough karma to different users for quality posts (+) or for spam/plagiarism (-) without worrying about running out of it. Especially when there is a gang of plagiarists.
If anything, I'd suggest users start with +1 karma, as I recogize users easily make a mistake in the beginning and can then no longer be eligible for signature campaigns. If they started with +1 K, then they would have one chance before having negative karma. Makes the forum a bit more friendly maybe.