Nigel, I accept your first point but I would still argue that the greater proportion of businesses, organisations etc. out there have managed to implement non-seniority based career progression without the world coming down around their ears?
You accept NoD's first point but what about the more important second paragraph of his post?
To give you an idea of what the current system prevents. There was a manager, very, very senior and, not to put too fine a point on it, he was an unpeasant individual (since resigned over a particularly nasty event).
I know for a fact that he and another senior manager used to have a competition running between each other regarding how LITTLE fuel they could each carry over a given period. It was a nightmare to fly with either of them because they would use every legal trick in the book to reduce fuel to an absolute minimum.
Now imagine if I am a first officer with sufficient experience to gain a command. Imagine that manager is the arbiter of who is suitable. Would his judgement be based on my overall suitability or would someone who carried less fuel on average than I did win the day? If the winner was the person who used less fuel then would it not be beyond the realms of possibility that first officers nearing the level of experience necessary for command would endeavour to impress by reducing their comfort margins by carrying less fuel?
Simplified example but the seniority system does put the promotion to command firmly beyond factors and personalities which could have a detrimental effect on safety.