Chess ratings

Chess.com is a place you'll find me frequenting practically every weekday at lunchtime. I enjoy playing chess. I find the simple fact that few games are ever alike and that it never gets boring or repetitive is pretty amazing.
Around December, I decided to step up and try to enter a tournament. A direct competition with anywhere from 3-10 other people (usually guys) in a best of two games. The winner of the first round moves on to the next. I shocked myself! I played really well, and almost won the 1st place spot! (took second). In addition, my rating sky-rocketed to almost 1700! (I usually am around 1400). I was feeling like I was starting to learn the game!
Well... I am in a rut like you would not believe. Perhaps I just got lucky, perhaps I was trying really hard because it was my first tournament, I'm not sure why exactly, but I can't seem to get my rating back up to how I was playing around early December.
At lunchtime, I play what is called "blitz chess" in that each game lasts 10 minutes (or less) per person (so a max of a 20 minute game, but that's extremely rare). I was up around a 1500 blitz rating. Well, not anymore. I've dropped to just around 1400, and can't seem to break that.
I find myself becoming frustrated, because I felt like I had something before that I can't recapture. I keep trying new tactics where I 'thought' that's what I was doing in December, but to no avail.
As I was re-thinking about all this the other day, I had a different thought. Perhaps the rating system is flawed?!
As a person plays more games, you would think that your rating would even out. But that doesn't seem to be the case. There are always new players joining chess.com, who always start off at 1200. So I could be playing a 1300, and loose to this guy who in actuality is really a 1600 player.
If it were a closed system, the ratings should level off, and be fairly accurate, but now I realize that's not the case. (I am still thinking about this, so I may change my opinion later).
I'm curious now if anyone has done a study on this. It seems ripe for study.
If there are any chess players who find this post, I'd be interested in your thoughts on this... do you feel any rating system is accurate? what sort of swing is normal? etc...
Meanwhile, I'll go back to pushing pieces around in the hopes I'll learn something.
If you ever want to play me, just look up cyenobite on chess.com