The concept of reputation is harmful to a meritocracy? I don't agree with this at all. Your friend didn't want to open source his project because he was annoyed that he wasn't a famous hacker type who can get free publicity, so he didn't think he would get paid to work on it? That's not how this works. That's not how any of this works.

Nobody gets torn to shreds on HN for showing people their project, people get torn to shreds for trying to use open source and HN as a cynical self-marketing tool, especially when they can't back it up with something cool and interesting. Open source doesn't exist to further the career or finances or reputations of open source authors, it's just a nice little miracle when it does.

If someone makes something great, there's a teeny tiny chance it'll catch on to become widely used, and if that happens there's an even teenier, tinier chance that the creator will at some point get paid to work on it, but that's a tiny sliver of the open source world. If that's all your friend cares about, then the meritocracy is real and working. Someone who will only write open source to become rich and famous is clearly deeply confused about how and why any of this stuff exists in the first place, and until they grow up they can't be relied on to do good work for good reasons.

However, there's a silver lining. If instead of becoming the next Linus, someone simply wants to steer their career towards working on open source professionally, that's awesome and commendable. There are lots of companies and government agencies and so on that pay people to work on open source projects as their day-to-day job. That doesn't take social capital or name recognition, that just requires getting a job in one of those organizations, which span the gamut from tiny startups, to giant companies like Google/Apple/Microsoft/etc., to government agencies like NASA. Tons of people get paid to work on open source if that's what your friend cares about.