Said it many times before, but I think trying to stop cheaters with any kind of anti-cheat is a losing battle.
Instead, Valve should look at the reasons why so many people choose to cheat. I think a big one is skill groups. They serve a useful purpose in matching players who are of a similar level, but when you tell players what skill group they're in and give them shiny badges to chase, that encourages cheating.
I also think the community should have more power to get suspected cheaters banned temporarily (not permanently because of the risk of false positives). The current overwatch / reporting system clearly isn't working as well as it should be. What I would do is make reports carry a lot more weight so that it only takes a couple on the same day to send someone to overwatch, and five during the same day to issue a temporary ban + overwatch. To prevent this system being abused, I would limit the number of times players can report someone during a week and take away the reporting privilege from players who have a high % of reporting people who don't end up with an overwatch conviction.