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.