You make a good point but I think in OSS projects merit is the only product being sold so meritocracy works. In a for profit organisation, you would always need a management layer because the focus should always be the product and not the individual contributors.
Even then, meritocracy is a pretty loaded term. The rewards don't align with the accomplishments. Being active in open source either requires huge sacrifices in time and career advancement or it requires an employer who provides time and opportunity to work on open source. That's not quite a meritocracy, as some are set up to succeed better than others regardless of skill.
