I, personally, am not a fan of excluding people because their gear isn't good enough. I will, however, exclude someone who isn't learning how to do a fight, even after numerous attempts. A damage meter is one of those ways to determine if someone is learning.

Take Garuda for instance, are the bards handling the plumes? Are your Garuda damage dealers taking her HP into phase 3? If you have multiple healers, are they both contributing? You can know that the group as a whole is doing fine if you are reaching your set goal, but if you aren't, it is nice to know who to give the advice to. Each member should be focusing on their personal performance and not feeling like they have to watch if someone else is doing their job.

I do like the fact that our parsers are running in the background so it doesn't pressure people during a fight to ignore certain mechanics (like taking avoidable damage) in order to top the charts. Its a small difference that has a big psychological effect, I think.