With the WHS the best 8 of the last 20 rounds are averaged. In talking to folks where I play, many sorta assume its an average of all, and that one bad score will raise an HCP index. It won't, only the the best 8 of last 20 are averaged.
You're right 54 is high. In the league I play in the highest we have is index of 49, and he's 86 years old, so I don't think you see too many at the extreme end.
In general, from my (admittedly narrow) experience it works pretty good as long as the differences aren't too great. And at the extremes, both plus HCPs and really high HCPs it maybe falls off a bit, but those are really thin slices of the golfing population.
I actually like it, and think it does a good job all-in-all allowing folks of various abilities to have adequately competive matches. Anecdotally, I lost match play last night giving up 6 strokes to my opponent, he won by one hole on the last hole, par vs bogey. And I won the net score by one, so it really was close!