As I argue in my post on the ethics of generalization, the problem with discrimination is that it is dehumanizing. If you treat me differently solely in virtue of my race or gender or age, then you are denying my agency as an individual person. You imply that my group affiliation is sufficiently informative for you to know who I am and what I am like. And this is incredibly insulting to my dignity as an individual. Just because your statistics indicate that young males are disproportionately violent, this doesn't mean that I am violent. If you prejudge me, you deny my individual agency. You deny that I am a distinct person, a free agent, an individual, who cannot be exhaustively specified in terms of my group affiliations. If you prejudge me, you shrink me as a person, down into your little 'box'. And that's insulting.
So that's why arbitrary discrimination is wrong. Obviously none of this applies to non-arbitrary discrimination. If you refuse someone a job because they're too short to use the current equipment, that's no insult to their dignity as a person. It's just unfortunate because it prevents them from getting what they want. (And, ideally, we should want to enable people to achieve what they want in life.) It isn't a discrimination issue, it's an opportunity issue.
Moreover, to try to reframe this as an implicit discrimination issue is itself wrong. Why? Because in doing so, you shrink the individual down into the restrictive little box that marks their group affiliation. If a short woman is prevented from doing what she wants, this is unfortunate because she is valuable as a human being. When feminists turn it into a gender issue, they instead say she is valuable insofar as she is a woman. They ignore the real individual person, and see her merely as a token of a type. She is so much more than that, but this is denied by sexists who see the individual solely as a member of some group. Feminists care about woman-tokens. Other Leftists more generally care about minority-tokens. I think that's perverse. We ought to care about people for who they are, not for what groups they belong to.
Sexism occurs when one fails to see the individual beyond the gender they belong to. An excellent example of this is Don Brash's recent comments to the effect that he went easy on Helen Clark in the debate because she was a woman. As Ghet insightfully notes:
I think he genuinely believes what he says, and that's the really alarming thing. Because any assessment that Helen Clark is somehow weak and can't handle the cut and thrust of politics has to be based on seeing her as a woman first, and as the person she is a distant second. She can be justifiably accused of a lot of things, but 'weak' simply isn't one of them. He can't see past her being a woman.
That, I think, is the essence of prejudice. And although the culprit in this case is of the standard Right-wing sort, I think many Leftists commit the same sin. When feminists go looking for implicit discrimination, they too can't see past the sex of the individuals. They fetishize this one characteristic to the exclusion of all else that makes us who we are.
And, indeed, this is the problem with Group Welfare more generally. Leftists want to improve the welfare of Maori qua Maori. Again, this is perverse and tokenistic. We should want to improve the welfare of Maori qua person. That is, we should have just the same concern for Maori individuals as we do for everybody else. A person does not become any more important simply in virtue of belonging to a minority group. To claim otherwise, as many Leftists seem to do, is wrong for all the reasons explained above. You're treating the person as a mere token of a type, and valuing them on that basis, rather than recognizing their worth as an individual person. To fetishize race in such a way is simply racist. That's what racism is, and why it's wrong.
Conservatives complain that the Left is racist because their discrimination unfairly disadvantages white people. This may be true, but it isn't the full story. Their fetishization of group characteristics dehumanizes everyone they assess in such a fashion. As such, Maori individuals are wronged by Leftist racism alongside non-Maori. We're all in this together.
Update: This post neglects some important considerations highlighted in my newer post, 'Widespread Discrimination'.