One of the benefits of making the review queue so open, whether this was by design or not, is that it encourages more people to get involved in community moderation early and help provide them with the skills they'll need to do a good job on these sorts of things once they become 2K, 3K, and 10K users.
Badges do two things:
They serve as goals for individuals to work towards to demonstrate they are doing good things for the site.
When a site has a lot of badge holders under one category, this shows that the community is active in this specific area, and this can roughly indicate the health of that community.
As an example, the copy editor badge may encourage people who already have the edit privilege to do their part in fixing posts that need some help. As an example, a site that has a lot of copy editor badge-holders shows that the community has really strong editing participation.
Reputation is for something different:
Reputation, on the other hand, is a rough measurement of how much the community trusts you. This is determined by the community's response to actions that you perform on the site through asking questions, providing answers, and editing questions, answers, and tag wikis. Badges are more automated, whereas reputation is given by the community.
Mixing the two together would be a mistake. Badges have nothing to do with privileges and that's how it should be. Think of badges as "flair", sort of like the medals on a soldier's uniform. With that analogy, privileges would be related to the soldier's rank.
