Key fragments is just based on number of games played for those 2+ honour (getting more honours or being higher level doesn't actually boost things). Level 1 has reduced rates and level 0 doesn't get any.
So theres basically 3 groups of players:
Those who play a lot, but either play only a small number of champs or are simply poor enough at the game to almost never get S ranks -- These people have tons of keys, but not enough chests.
Those who don't play that much, but play a wide range of champs and/or are of a skill level that they can grind out an S without much issue -- These people have an excess of chests but not enough keys.
Those who play a lot, and are good at a variety of champs -- These people find the system balanced (max key frags in ~1 month is 12, so 4 keys for the 4 chests one gets in a month).
Every now and then theres threads by people in the first two categories grumbling about how they should be able to get more chests per champ per season, or that key frags should be more common, but given they both show up it strikes me as the system working as intended.
That said, every now and then theres events that include key fragments as a possible reward, but as of yet theres been no events with locked chests as a possible reward (always been either orbs/capsules or chest+key as in the current event). Additionally, honour capsules sometimes give 2+ fragments despite counting as only 'one' fragment drop, so people are occasionally able to get more than 12 fragments in a month if they're hardcore and/or lucky with capsule drops, so an argument could be made that keys are actually the thing in excess in the system. It's easier to be lazier in a month and not cap fragment drops though compared to mastery chests which most people can grind out in a weekend though, so it seems appropriate to me.
