What do you mean by this? What creates a hierarchy of classes? Different social groups? Differing amounts of wealth? Different amounts of power to get stuff done? I think, in the end, it's got to come down to power, but I feel like it's good for society to distribute more power to people able to get better things done.
I agree with you that the term 'merit' now has a connotation of 'you deserve everything you can get'. It feels like a misappropriation of stewardship to take $100m to buy a yacht. If a government official did that, they would go straight to jail, but we somehow justify it under capitalism because maybe the CEO really wanted a yacht, and that's the only reason they started the business (in which case, I'm actually kind of fine with that $100m going to a yacht, as long as they were in the business of creating, not extracting, wealth). I don't think this is really a solvable problem, because to measure who's good at creating wealth, you kind of have to use wealth. Maybe we could have government-assigned stewards over pots of money, but that might have even bigger problems.