Absolutely agreed that the difference between "I'm worse off than I was, and you're better off" (as in your example) and "I'm better off than I was, and you're much more better off than I am" (e.g.; we start off at 10 utilons each, a randomly chosen person gets +1010 utilons and everyone else gets +10 utilons) matters here.

I'm talking about the second case... that is, I'm not making the "maximize global utility" argument.

This has nothing to do with inequity. The second case is just as unequal as the first: at the end of the day one person has 999 utility more than his neighbors. The difference is that in the second case his neighbors are better off than they were at the start, and in the first case they are worse off.

As for whether one or the other real-world cases (e.g., socialist/libertarian) are more like the first or second; I don't really know.