No, the point is that you turn everyone into a black sheep. If you make taxes factually optional by simplifying the form to "do you have income tax to pay, if so, how much?" with no checks and control, you're creating an incentive to lie, and people will lie.
The same happens when you put "subjective feeling of how much money you deserve" on the list of criteria of how much money to pay that person.
> Does this not already exist in other parts of social security programs? Or taking loans? What is the difference, what is new?
It does not. Means tested social security programs are individual. You make less than X, you're eligible for rent support. Grievance studies are not, it's "you're gender x, ethnicity y or subculture z, you get extra bonuses, don't need to reach the same scores for qualifications etc". It's not individual, it's based on some arbitrary group identity.
What you throw out of the window with that line of thinking is the fundamental possibility that innate interests (for gender) and culture (for some minority groups) have anything to do with success. The idea that you just need to pretend that somebody is X to make them value X and put an emphasis on X for their children is completely backwards.