Er... the lowest 1-2% is a subset of the lowest 5%. So they'd actually be helping 1-2% at the expense of 3-4%.
You're also assuming that height is judged on a percentile basis - that being one of the shortest 1% is bad regardless of how different that is from the average height - and I'm not at all sure that's accurate. It seems much more likely to me that height is judged relative to the judger's height, so a 6" difference is a 6" difference (with variations between how different people react to a 6" difference, of course) regardless of whether there are many, few, or no shorter people in the population. This is purely theoretical (I'm not sure it stands up to being thought of in terms of how people are socialized to react to each other), but my point is really that there are several ways the height difference issue could actually work.
I said "5% of men" not "the bottom 5% of men."
There was some talk here about height taxes, but there's a better solution - redefine shortness as a treatable condition and use HGH to cure it. They even got FDA on board with that, at least for 1.2% shortest people.
Unsatisfactory sexual performance became a treatable condition with Viagra. Depression and hyperactivity became treatable conditions with SSRIs. Being ugly is already almost considered a treatable condition, at least one can get that impression from cosmetic surgery ads. Being overweight is universally considered an illness, even though we don't have too many effective treatment options (surgery is unpopular, and effective drugs like fen-phen and ECA are not officially prescribed any more). If we ever figure out how to increase IQ, you can be certain low IQ will be considered a treatable condition too. Almost everything undesirable gets redefined as an illness as soon as an effective way to fix it is developed.
I welcome these changes. Yes, redefining large parts of normal human variability as illness is a lie, but if that's what society needs to work around its taboos against human enhancement, so be it.