The problem with seniority lists , like any military hierachy, is that it also allow's completely dysfunctional and personality deficient people ( even though they may be technically qualified) to get into positions of enormous power and authority,( enabling them to make everyone else's life unpleasant), simply because they are in the system.
I disagree with the basic premise of your contention. The military hierarchy is not seniority based, it's based on competence (ostensibly). But, as an ex-SAAF jock, we all know the type of personality it took to get ahead in the military. And it had nothing to do with your competence as an officer or pilot!
A seniority list, almost by definition, takes that 'personality' factor out of the equation. It is based purely on when you were hired and ability to meet and maintain a pre-determined standard of competence.
My experience of seniority lists is based on my experience of being a pilot for a major US airline for the last twenty three years. When a pilot goes into management, he is no longer considered part of the seniority list. Yes, he keeps his number in case he ever goes back to the line. In effect, he is trying to get ahead independently of his seniority on the list. So, in many ways, management pilots are not unlike ambitious military officers.
But for the majority of pilots making their way up the seniority list, the system works remarkably well. Everything is dictated by seniority. Seat, equipment, trips, bases, vacation, days off, and so forth. After devoting twenty three years of my life to this company why should I not be better paid, fly bigger jets, or have more days off than the guy who was hired last year?
The seniority system works remarkably well if you plan on making a career out of a particular airline. I suppose it matters less if you're just building time.