I think see any problems in both advantage and treaths is the only way to reach a better solution-
The idea that talent would be more naturally distributed throughout society without a meritocracy and with one talent would be concentrated at the high end was a serious worry a generation ago. Daniel Bell, Public Interest, 1972, On Meritocracy and Equality: But with that transformation came an unexpected reaction. Previously, talent had been distributed throughout the society, and each class or social group had its own natural leaders. Now all men of talent were raised into a common elite, and those below had no excuses for their failures; they bore the stigma of rejection, they were known inferiors. Others worried that the best working-class minds that would build unions and a stronger labor force would be scooped up by the meritocracy and become the foot soldiers for management (see the recent movie Ressources humaines for an example of this narrative). If you view entrepreneurial activities as the act of challenging and disassembling powerful incumbents, as I imagine Thiel does, the meritocracy poses a very similar problem.