Blanket Bounties are not as bad as you make them out to be. I used to run the OC Blanket bounties, and there are other numerous examples; They don't pay as much, they usually have a fair amount of restrictions, and for the lawfuls, you usually have to catch the pirate in the act of committing a crime to grab the bounty. For example, the OC blanket bounty is one of the more higher-paying blanket bounties, however it also only targets certain factions. It isn't a 'kill all lawfuls' bounty. Most lawful blanket bounties are 'unlawfuls in that houses space.' You can't kill a Hessian in Rheinland and try to claim it in Liberty.
These aren't abused. As was already said here, they just give a little extra cash and something to do for bounty hunters and between the bigger jobs. You seem to think BHG are running rampant because of it, but honestly, BHG counts are the lowest they've been since 4.82. We wanted to get rid of the ridiculous BHG spam and abuse, not destroy the faction altogether.