The beneficiaries of the older system rarely wondered if they were the best candidates for the job, so why should anyone today give it a second thought?
That problems of nepotism, or cronyism have already existed to some extent, is another conversation.
I also don't know why "merit" is in quotes. Hiring based on merit is going to be the main goal for companies that are not corrupt.
Corruption should also be discouraged e.g. by stopping companies becoming "too big to fail", or by being anti-competitive, or by actually creating legislation that actually protects against discrimination, rather than by perpetuating it.
That corruption exists, is not an argument to ignore corruption in another form.
"Merit" as I understand it—who can best perform the job—has almost never been the primary hiring characteristic. Companies are comprised of people and those people are almost always the ones making the ultimate decisions. In hiring, this means that "merit" almost always means something different or is a secondary consideration behind more personal factors. "Is diverse" doesn't really strike me as inherently more corrupt a trait than "went to the same school I did" or "is a member of the same country club I am," though why it gets a lot more attention is certainly not a mystery.
You seem to be discounting the meritocratic process by which people end up graduating from high-ranking schools. Prestigious law firms for instance will only consider graduates from specific institutions, specifically because they act as a filter for talent and ability.
You also seem to be conflating the hiring of people who are culturally similar to corruption. In fact there are many benefits in collaborating in a culturally homogenous environment. Maintaining such an environment in order to reap those benefits has merit too.
Please read some autobiographies of people from diverse backgrounds trying to break into atypical careers, the topic of imposter syndrome and anxieties about wanting to be taken on one's own merits regularly features.
What would be an example of a company where “those people” (who comprise the company) are not making “the ultimate decisions”?
