It's not about necessity or a guarantee that capitalism will progress. It's about the abstractness of economic models functioning as, or being easily mistaken for an ideal to be pursued. The model's used as a cudgel against government since by interfering with a system that's ideally or potentially self-regulating, government's only making things worse. The best, most optimal condition is for government to get out of capitalism's way. That's what Reagan and Thatcher said, and they were backed by neoclassical economists.

So pareto optimality is supposed to be a tautology, a definition of what would be the best outcome in an economy: you'd have no more trading to do because any further trading would make someone worse off.

In Heaven, a utopian place in which everyone earns what they have, the situation would indeed be pareto optimal. In reality, plenty of folks don't deserve their private property because they obtained it in all kinds of dubious ways. That's the impetus behind redistributing wealth by taking more from the rich, because we suspect it's impossible to make such a fortune without screwing over many people and without benefitting from a rigged system (in which wealthy people's lobbyists control the tax code, or their army of high-powered lawyers make them virtually above the law, and so on).

In reality, then, when economists hold out pareto optimality as the best standard they can come up with, that looks like a whitewashing because it sidesteps the motive behind governmental redistribution of wealth. Economists abstract from the reality that the social status quo is never fair. Some people deserve to be made worse off to make up for the wrongness of how they obtained their wealth in a rigged economic system. Pareto's point against utilitarianism is that it's wrong for a minority to be sacrificed to benefit the majority. But that assumes the wealthy minority are Christlike, whereas they're more like the opposite of saints. Pareto optimality assumes the economy isn't rigged, but self-optimizing. And that's obnoxious rather than scientific.