NEW Ranking System
The ranking system needs to be based on performance. Performance as can be measured with : Total Kills, Assists, Damage Dealt, Creep Score, Buildings Destroyed, Dragons Slain, Barons, Total Deaths, Gold Made, etc (Basically anything positive). No matter what his stats are; a player can't win LP by losing and he can't lose LP by winning. The stats just determine the multiplier used to calculate how much LP is won or lost.
For example you won: You won the game and you did good in all categories. Your multiplier will be something like 4.0 x the base of say 5. Therefore your total LP gain is 4 x 5 = 20 LP. If you did bad in all the categories you might end up with a multiplier of 1.1. Therefore your final LP score would be 1.1 x 5 = 5.5 LP
For example you lost: You did great in all categories but still lost the game. Your multiplier is something like 1.1 x the base of say -5. Therefore your total LP loss is 1.1x -5 = -5.5 LP
You did awful and most likely fed or trolled. Your multiplier is something like 5.0 x the base of -5. Your total loss is 5 x -5 = -25 LP
You AFK'ed. Your multiplier is something like 6 x the base of -5. Your total loss is 6 x -5 = -30 LP
If someone is AFK for 5 minutes at the start of the game, you all have the option to surrender with a low penalty. For example: 5 minutes in you know it will be a 4 on 5. You can all agree to surrender and lose 0LP or something really low like 2LP. Or you can vote to continue and still win. That beats having to wait 20 minutes for an almost sure outcome and then lose 21 LP for something you could not control.
After discussion, some people made a good point about supports falling behind. Well since a good support will typically get a lot of assists you can weight assists to count more than a kill. Therefore if you get 3 kills but 25 assists you will actually get more LP credit than the guy who got 25 kills and 3 assists. You would also get a lot of credit for wards placed. All in all this should average out with some fine tuning to allow the support to be able to get just as much or more LP than the other roles on the team depending on their performance.
Another valid point that was made is whether or not to include "damage taken" in the LP multiplier calculation. I think the best way to deal with it and the role tanks play is to remove "damage taken" from the calculation entirely.
If you're at the top of the list in any category, or all of them, then do you deserve to lose the same LP as the guy who went AFK or fed the entire game?
I don't think people would abuse it the way you say. Why? Because doing something as pointless as placing wards at the fountain would not help them win the game. They would just lose LP in the end so what's the point? Let's see, we have 5 minutes to try and win. Should I try and win and gain 25 LP or should I try and lose LP by placing wards and lose 2 less LP? I think all this abuse you foresee would not happen for this reason. People still try to win. If they think that continuing the game will lose them more LP they will surrender.
Another thing that would prevent the scenarios you describe with warding: For each objective you lose, you lose more LP. Therefore if you decide to stop trying and just place wards you will lose more LP as the enemy team takes all your objectives. Instead you can either try to win or you can surrender and cut your losses.
The irony of this is you don't see how abused the current system is. I think the current system is far more open to abuse with people going AFK on purpose when they start to lose, trolling when they don't get the lane they want, KS'ing as support just because they don't want to play the support role, never warding because it would cost them extra money even though it would help the team, jungling to buy more items rather than helping the team when needed. I think under the current system people are far MORE selfish. You have to be blind not to realize that.