Are there repercussions if you suck and cause huge accidents?
Definitely. There are two major rankings that you need to be aware of while racing. The biggest is SR, or Safety Rating. There is an entire system in place that constitutes what leagues you can race in and what licenses you have depending on your SR.
You start with a rookie license and a 2.5 SR (I'm pretty sure it's still 2.5). As you race clean laps, your SR increases after each race. Once you hit the 3.0 SR threshold, a new league will open up. As you hit 4.0 SR, you will be eligible to go to the next license, at which point your SR will decrease and you begin the climb again. They used to only do license upgrades every 3 months, but I believe they've changed it now so that you can upgrade as soon as possible.
However, there are many factors where your SR can decrease. Running off the track, making contact with the wall, going the wrong way, and making contact with other cars. Each incident is rated on a 1-4 scale. Running off the track is at the lower end while hitting other cars is the high end. Make no mistake about it, having 2 or 3 incidents during a race can stagnate your SR or even lower it. You really have to do your best to drive clean. The SR and the subscription model pretty much keeps out the idiots and lets you focus on racing. People still make mistakes though, and the SR system does not try to find fault. That means if somebody runs into you, you most likely will still get counted for an incident. It can be frustrating since you can drive cleanly and still loose SR, but it is what it is.
The base subscription model gives you enough tracks and vehicles to compete in the rookie leagues. Once you get to the D league, you have to start buying stuff on top of your subscription.
The second rating I mentioned above is your iRating. You only start with this once you start racing in D leagues and it's a measure of your skill. The better you do, the higher it goes and you are attempted to be paired with people of similar rating.
You also have the option to race in hosted sessions, which is basically user-made races that aren't attached to the leagues at all. A lot of people run their own leagues with their own websites and stuff, and these hosted sessions completely ignore SR and iRating. The hosted sessions are also a great way to race on tracks with vehicles that you normally wouldn't have the license for. When I first started, they didn't have hosted sessions, just the official league races. I picked up a couple of tracks and cars, but couldn't do anything but practice on an empty track because I didn't have the proper license.
I actually don't race much on the service anymore. I run a few practice laps every now and then, but that's pretty much it. Overall though, if you don't mind the cost, it's pretty awesome.
EDIT: Forgot to add that if you go in and start causing wrecks (or somebody does to you), there is a complaint system where you can report the driver and submit a replay. iRacing themselves will investigate and take action on anyone intentionally ruining the game for others, and they've been known to kick people off the service.