The exemption is such that it needs to be changed according to region; what is reasonable in one place (say Arkansas) might be ridiculously low in another (say LA).
The logical way to do that would be to calculate it by postal code or some such (er, zip code I guess for you guys).
That said, I think the inheritance tax is a Good Thing; while it may not seem ideologically reasonable, practical experience shows that it does what it's supposed to do and does it well (cf- Gilded Age).