Absolutely! Karate competition is supposed to be fun and enjoyable for everybody. It's really disappointing to learn that you were eliminated not because the other competitor was the better of the two of you, but because the referees want to stay on the competitor's instructors good side - especially if their instructor is the event organiser or the head of a governing body etc. Let the people who work hard for something that shouldn't be easy win over the people who don't need to do anything to get through because of who they're tied in with.
In the same way I also think repassage should be abolished - if you get knocked out in an early round: that's it, game over. Harsh for some but its the fairest and most honest way.