The most compelling reason for a reset, in my opinion, is that when stats become visible players are going to be empowered to make decisions about which games they join. Players who previously lost a lot because they joined uneven games and who won a lot of games the matching system didn't value have a pretty big hole to climb out of.
I think this is a good point too. I encounter annoying situations simply because I have good stats. When I do play PUGs, I still get people who join, see that someone with a halfway decent record joined on my team because they check stats, call us a premade, then leave. To me, I think it will be even harder to get games going once the new system is in place. Or there will be a big call to switch up teams when I am playing with my team on a vent server... which means we might switch up teams, but then I'd lose voice chat. That said, if everyone started from scratch, that would mitigate the issue to some degree, but it doesn't really solve the problem... it just masks it for a time.
They should reset favor points frequently, just not take away favor items. I seriously have 40k favor points now, what's the point?
I also have a rediculous amount of favor, but casual players more than likely do not. As there are 2 audiences (casual/hardcore), both should be taken into account. So, what would be a good system that would make both audiences happy? I know when I was new to the game, grinding out games to get favor was a fun, added bonus. Now that I have a rediculous amount of favor, it's a silly mechanic. If favor is reset frequently but I get to keep whatever items I've purchased, I'll quickly own all the favor items I want and it won't matter if I have 0 favor. If you take away both favor and the favor items, I'm forced to grind through again to get items. This, while somewhat annoying, would make the game mechanic valid again, but would not benefit the casual game audience much at all.