There are several factors influencing this shift and that can look different company to company, however, a huge influence here is the change in perspective on company "loyalty". It used to be common for a single worker to stay in the same company, maybe even the same role for nearly all of their career, which was considered valuable by employers. Now that it much less common, even less possible for employees. Between increased agility on the employee side and decreased loyalty on the employer side (mass layoffs, decreased support, higher demands lower wages), loyalty is less and less of a driver in the employee/employer relationship. Seniority perks were built to reward an employee being loyal to a company. There is little benefit in employers trying to entice loyalty anymore so it's more beneficial to entice higher productivity or results so they focus on rewarding performance.
Using this method for shift and vacation assignment does strike me as odd. I don't know your industry but in some, performance could be impacted by the shifts (late shifts may be less likely to bring the same number of sales opportunities as daytime shifts, for example) and everyone is entitled to vacation time.. performance could be impacted by lack of rest.
Without knowing the particulars that could get dicey. However, I'd say the general shift away from rewarding seniority is an honest reaction to the general shift in the workforce away from showing brand loyalty. As it trends, it does feel a bit unfair to those who worked toward that, thinking, "I work hard and "pay my dues" early on, I can kick my feet up a little and sail smoother in the later time", but I think it's not typically ill-intended, just growing pains.
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