The way it's used by most hackers is to say that someone's work is judged only on its own merits, rather than the author's social status or how good they are at playing political games or anything else orthogonal to the work actually being valuable.
At least, that's the ideal.
I care quite a bit that the best cancer researchers should get hired, and the best ideas get the money -- their progress is likely to directly affect people close to me. And this is true but less obvious for almost every field... an economy where everyone was focused solely on zero-sum competitions would not grow very fast.
I don't quite know what cosmic fairness means. But perhaps cosmic unfairness involves people's talents not being identical. The goal of trying to get the fastest progress against cancer does not align with the goal of trying to remedy such unfairness.
The position that states "remedying inequity costs more than simply giving it all to the current best" is a shortsighted one.
So in order to get the best doctors you can't just be all "meritocratic" by looking only at the results, i.e. grades, but have to take other factors into account.
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The relationship between school type and academic performance at medical school: a national, multi-cohort study https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5589012/
What is the effect of secondary (high) schooling on subsequent medical school performance? A national, UK-based, cohort study. https://www.ncbi.nlm.nih.gov/pubmed/29792300
We should aim to admit to medical school the people who'll make the best doctors at age 40, not just the people with the best scores at age 18.