The whole idea of a spot in pool is to get weaker players to think they have enough of a chance to beat a better player that they are willing to get into action. Whether it's an A player vs. a B player, a D- player against a D player, a tournament or gambling, a proper spot should still give the better player the upper hand.
As much complaining as I've heard about handicaps, there is a very limited practical demand for non-handicapped tournaments. Open tournaments attract 3 types of players: the real contenders, the long shots, and the players that are willing to donate for the experience or recognition from their peers. How often would you show up for a tournament and pay a significant amount of money (beyond whatever you consider the entertainment/social value) when you are practically guaranteed to be out in the first few rounds?
Some of the most fun I've had playing pool was when we managed to get a group of fairly evenly matched players (B/B+) together and run our own small $50 double-elimination tournament. Everyone was comfortable playing even with all of the other players even though there were some definite favorites to win the whole thing. This went on for a while until we invited a player that was clearly better than the entire group to join us, and then it all fell apart, almost overnight (I think we had 2 tournaments with him before it stopped). Having that one better player didn't really add anything to the experience, but it significantly detracted from everyone's perceived chance of winning to pot. The money itself wasn't enough to be an issue for anyone; it was the feeling that you were just giving it away that was the problem.
To those that say the players that are asking for handicaps just need to get better, you have to consider the fact that playing pool well and winning money by doing so just isn't a priority to everyone. I know very few, if any, players above the C level that haven't dedicated a large amount of their free time to pool in the past, and I don't know any A players that maintain that level of play without playing on a regular basis.
To the weaker players that need handicaps to compete, I would say that you shouldn't expect a handicap that gives you an even chance of winning (at least in a tournament; matching up is a different story). IMO, proper handicapping should still make the weaker player the underdog, and the inevitable result is that a very low ranked player is going to still be a severe underdog to a very high ranked player. The best players should always be the favorite to win a tournament.