The rating system you are using creates a rating pool based on Active Players. You need to degrade the rating every month for inactive players with less than 1000 games.
There are players with high ratings who played at the outset of the game when the talent pool was minimal they won a few games got there rating up and then stopped playing. That doesnt reflect the current state of the active players
The rating drops every day when someone doesn't play a rated game. Of course the argument can be made if it drops enough.
I'm usually inactive for 5-6 months because I go away on frequent holidays each winter (but not this year - I wonder why), which makes buying a subscription for the 1-2 weeks between each trip unattractive. That's enough for my rating to drop by about 3 (or maybe even a bit more) if I recall correctly, so I suspect the current rate at which ratings decay is adequate to clear inactive players from the leaderboard within a reasonable period. It would, however, be interesting to be able to see stats for just active players, though no doubt there would be disagreement as to what constitutes an active player.