I thought the basis of weighted races (handicapped) in tournaments was in effort to fill the bracket. Not to make anything 'fair'.
I have only recently started to play in tournaments again. My location of choice reports to Fargo but doesn't seem to use it when handicapping the entry fee. They use some sort of Skill Level ranking that caps at 10(pro). I'm sure there's some kind of correlation to Fargo.
I gotcha. In my town, we call those "capped". The lower players are definitely hating it. I hate when they hold tournaments that are capped AND handicapped!