I can tell you that voluntarily 1% provider fee doesn't nearly cover the operational cost of running the service. In fact, the service requires both investments of my personal time and money in order to exist.

Regarding your point the process is flawed, I frankly disagree:
The open referral system was designed to encourage people to refer new accounts to HIVE. These referral accounts are responsible for supporting the user in terms both SP and help getting started.

Many frontends like @hiveonboard or @peakd pushed the idea even further and created user interfaces for referrals who may track their referred accounts and one-click delegate SP to them.

There are even two open source bots out there (from which I know) where this process can be automated.

I would suggest to learn more about the design of Open Referral System first and make proper suggestions how to improve it instead of making false accuses.

That's the difference between constructive and destructive criticism.