The problem may not be that talent and skill are rewarded, but that the rewards are based on "relative" talent and skill. If only the top 20% of a game's players are rewarded, 80% must be receiving a little reward, even if objectively they are highly talented. If there is no hope in the future of these players being rewarded, they will likely leave the game, causing the population to shrink, and thus reducing the number of people who can be in the top 20%. Grinding has the benefit that, although only 20% of the population may be rewarded at any given time, 100% of the population will have the potential to be rewarded in the future, and will have no reason to quit.