Interesting concept. I'm not one who has a problem with the size of the Hall, so for me I don't see the purpose.
A few thoughts:
- I think it would be pretty hurtful if a living player was deselected. I know the goal of the Hall is not to worry about people's feelings, but that seems pretty cool
- Removing people would reduce the meaning of being elected
- Any time people are deselected it basically removes the credibility of the electing body
- I feel like the benefits you are looking for could be done by creating an "inner-circle HOF". Using a similar mechanism it could be limited to 30 players (or whatever number). It would also give everyone a chance to reexamine the careers of the greatest players ever, and make for a lot of fun conversation.
I think I've talked myself into the inner circle idea.
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