I think the way that it is done now is good, where the staff discuss the members who they think ahould be elites. However, I think the decisions should be more frequent, and if the member becomes inactive, I think they should be stripped of their eliteness because if they're not here, then there is no point in giving them priviledges.
I do however, agree with the nomination suggestion. I think if the person concerned feels they should be elite, then they should be able to round up a decent amount of members to start a "campaign" or something.