Also, my theory went that the old system encouraged hedging in debated matches, because being off hurt you twice as much when you were on the wrong side of 50%, so if you were uncertain it was a lot safer to go close to 50%.

Worse yet, there was a situation in which the 45-2x penalty essentially violated the spirit of the Oracle Challenge: If you were the highest-ranked player picking the underdog in a match, the result you most wanted to see was not exactly what you predicted, but rather the underdog to win with as close to 72.5% as possible. Even if you were way too low, for every point you were losing, everyone above you was losing two (above 72.5%, they've all guaranteed to score zero and you're still losing points).
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Champions of Time and Space: The Summer Contest 2003 Fanfiction Project
http://crolapras.tripod.com/ffproj.html