I think the problem with this fundamentally ignores how steem functions and how markets work.

What gives steem its value? Ultimately it is the demand for steem. What creates demand for steem? Primarily it is the opportunity to earn more rewards and have greater influence in regards to who is rewarded, thereby, in theory, further increasing the value of steem. The theory is that if better content is rewarded, more users and quality content creators will be drawn here creating a more popular platform, a higher demand for steem, and therefore more value. This doesn't work perfectly because people aren't perfect but it will have to succeed to some degree or the platform will fail.

I think doing what you say would destroy the value of steem and therefore the platform. Plus it is impractical and probably impossible. You might get a few idealists who happen to agree with you to refuse payout but most people making more than a few bucks would be hesitant to do that. It goes against their self interest for what very likely will be little to no gain. Plus there are some that have come to depend on the income derived from steem. If you hurt them are you better than someone abusing a flag?

Today, anybody can become a whale provided you buy enough steempower. That means there alway can and always will be "whales". I don't know of anything that can change that fact without permanently destroying the value of steem and then what is the point? This is a consequence of free markets and while it may not be perfect, there is nothing better and there probably won't be unless you can substantially change human nature. Money will alway buy influence because people are willing to do things (some more than others) for money. People need it and they want it.

Then there is how you use the word "meritocracy". Assuming the whales on this platform did not steal or defraud their way into becoming whales then they got where they are via merit. Ultimately, the market decides merit. Either enough people will get fed up with how steem works and leave, forcing the whales to make adjustments or not. Given how the value of steem is derived, I don't think such adjustments can be fundamental though.

One further point. Don't forget that ultimately it is the witnesses who are voted upon than really decide the direction of the platform. Witnesses may often be whales but they are not synonymous.