Actually, most handicap systems have a slight to moderate bias in favor of those with the stronger handicap.
I understand your sentiment. It does create a bit of conflict. Ranking systems are difficult to construct and implement, and even with adequate data (which is rare) there always exists some element that will be unhappy with the result. Again, we can look at the history of college football as a guide.
On the other hand, pool is not alone in this regard. Most recreational sports leagues do away with a handicap system in favor of a tiered skill structure. The desired result is still the same -- to create balanced competition. One of the issues, however, is that it takes a certain number of entries to make such a structure work, whereas a handicap system can create a larger field by attempting to balance everyone against everyone rather than placing members in small, presumed equivalent, subsets. Even then, there is usually some debate as to the perceived ranking.
The other problem with pure open formats is that the number of entries becomes exclusive to only those that feel they have a chance to win. Most people do not like to compete if they do not feel they have a chance at being victorious. Therefore, open events, particularly on a small scale, have a reasonable probability of never getting off the ground due to potential low entries.
In a basketball game, I only need to win 1 out of 4 quarters to win the game. Baseballl, 1 of 9 innings to win the game. Auto racing, one of potentially hundreds of laps and win the race. 9 ball can be won by pocketing 1 out of the 9 balls. Some variant rules of 8 ball can have a winner declared without ever pocketing a ball!
It is all about how one defines the system. Some systems are based on an aggregate. Some only count the accumulation of these subsystems and disregard the aggregate entirely. What is fair often tends to be defined as such by tradition.