People already pay others to play on their account so they can get a flashy weapon (or multiple) and titles, so it would only be a matter of time before people were paying for someone else to get them 'medals' and then wave around the fancy rewards to try to trick people into thinking they're good.

I don't think this system is required, only because it sort of already does, just not in such a specific way. You get loot at the end of a duty (tomes, etc.) and possibly loot throughout. Those are your rewards for completing parts or all of it. That's your gold medal. If you complete the duty, you pass. In regular content (i.e. outside Savage and Ultimate) there's no reason to go above and beyond what the average duty requires, and there's no reason to expect it of others too. Dangling loot in front of their faces because you want to finish a dungeon 2 minutes faster will just create a whole host of other problems, like others have mentioned.