Nepotism is bad for the same reason DEI is bad. If you don't hire or promote based on merit, you end up with unqualified people in positions that make bad decisions and damage the company. That's bad for everybody; employees, stock holders, and customers.

The best way to create a better life for your children is to give them a solid foundation to make their own success. That means education, setting a good example, instilling them with morals, giving them a sense of personal responsibility, and not spoiling them. Which means they have to pay for their mistakes and don't get everything handed to them on a silver platter. Raise a child right and they will make their own success and not be dependent on you.