Nepotism is mostly a scaling problem. If you have a decent family and aren't an idiot about it - then for smaller stakes, and over shorter time-spans, nepotism usually works extremely well. And there is precious little damage to society, if Chuck hires his son Sam to drive one of his Chilly Chuck's Ice Cream Trucks for the summer.

But scale up enough, and nepotism looks both idiotic and evil. The "overhead" of finding, vetting, and orienting new talent - not meaningfully related to you - is relatively fixed. Vs. the chance that Albert Einstein's son is also a Nobel-level physicist is pretty damn low.

[Added] The top end of the nepotism disaster scale, of course, is having hereditary government leadership. So when "noble blood" yet again proves itself piss-poor, the go-to ways to replace the ruler are often murder, mayhem, and/or war.