Sure, peer review is not flawless. But flawed procedures can either be replaced or improved. Improvement keeps what is good and changes the rest. Complete replacement may come with new problems.
Don't think that you can escape vanity where people are involved. Not even in science. There are also always people who make use of system errors. As long as that is only a few percent, we do pretty well.
And yes, I think snowwrestler also has a very good point.
Division of labor does not imply peer review. Peer review is merely an ad hoc, unproven, flawed way of implementing division of labor.