I think the problem with standardized tests is that they're standardized; you can prepare for them. It reduces both the effectiveness and the equity, because preparation for the tests is something that rich kids will have better time and access to.
Prep helps, but prep has a limit. A Golf tutor, high tier equipment, admission to private school with a large golf team, etc. are more easily bought.
Honest question: what is it about the standardization that fundamentally makes standardized tests easier to prepare for vs. non-standardized tests? It's not like either sort of test re-uses questions year-to-year, or that non-standardized tests have mystery subject matter.
The standardization is that everyone gets the same questions, or a mix from the same pool of questions. That aspect doesn't seem to make preparation any easier or harder, unless you're talking about the standardization making elaborate cheating schemes scale better, but that's not generally considered prep.
An example of how merit based systems also favor the rich is the UN internship system. You are an unpaid intern in Genova, one of the most expensive cities in the world. If you pass, you have an easy path through the UN but only the rich can afford that.
I think the real issue is money is useful beyond buying hedonism and comfort.
I'm all for equal opportunity, but not of outcomes.