There are merits to both sides in this argument.
My 2 cents. We are in one of the only jobs in the world where experience probably outweighs ability, certainly in the LHS. You can be a very good/safe captain without being the world's best pilot. The inverse is also true.
One thing about a seniority list and the avoidance of DEC, is that the people in the LHS are used to company procedures and routes and are known to the company. There are also years of flying in the RHS where ingrained errors/behaviours/high risk characteristics can be identified and addressed.
Sure, it is not a perfect system, but it is very difficult to measure command ability, even in the sim and that is unfortunately what you need to measure if you move to a merit based system. Flying ability counts for very little in the LHS (obviously there is a basic minimum requirement for stick and rudder skills, but most pilots have that by the time they get command).
Shouldnt experience and hard work be rewarded?
Unfortunately hard work does not make you a good captain, and neither is flying hours a true and honest measure of experience. The safe way for an airline or other large operator to avoid expensive mistakes in upgrades, is an apprenticeship phase (as FO). This just happens to correspond to the warm and fuzzy feeling provided by a seniority list for people already in an airline.
So, a good compromise all around.
BTW, there are two kinds of people I have never met:
1. A man who did not think that he was at least an above average car driver.
2. A pilot that did not think he was at least an above average stick and throttle man and would make an excellent captain.