This system is already in eve and works quite well in that it can't really be used for griefing. Just because someone has a bounty on them doesn't mean it's ok for just anyone to kill them.
Putting a bounty on a person just means that you will pay the person who kills them. It does NOT remove game rules related to PvP.
For example, if you have a bounty on you and someone wants to collect it. They can't just attack you in the middle of town. That is exactly the same as attack just any random person in the middle of town and will likely result in being killed by the NPC guards very quickly.
The only flaw with this system in eve is that anyone can kill the person to collect. So if I grief you and you put a huge bounty on me, I'll just grab a friend and go somewhere that he can kill me with no penalty and then we split the payout. That is why they want to add the part where you can specify who is allowed to collect on the bounty. It will still be possible for people to scam but the scam will have to be a lot more elaborate as one of the scammers will have to convince the mark that they are unaffiliated with the bait.
Due to the effort involved in that, I'd say it's ok. The point of a sandbox is that you take on whatever role you want, they aren't per-defined by the game. That includes conman and bandit and that's what makes it fun ;)