Is meritocracy ideal? Is a purely meritocracy society the one that maximizes happiness for the greatest number of people?
I'd be concerned about problems from having a sharper divide between "employable" and "not employable", and instead of people who struggle to find/keep a job you'd have (slightly fewer) people who can't get jobs at all. That seems likely to cause more social problems.
Assuming we discover a perfect way to measure merit, what do we do with people who lack merit? What alternatives do you offer them over crime or suicide?