I think the seeming contradiction can be broken and located on a more or less precisely defined point between the extremes. And this goes as follows:
Most humans don't value all lives the same. The ancestral environment has made us to value people near us more than distant people. People more distant than the closest 150 (dunbars number) receive significantly less attention (and in some hunter gatherer communities the value may be actually zero or possibly even negative). Our modern society has allowed us to apply ethics and empathize will all beings and this flattens out the valuation of human lives. But only in the idealized case does it value all beings equally. Humans intuitively don't.
So if you add people and redistribute most people even if they consciously accept equal valuation will be caught by the conclusion repugnant to their intuition. They don't really value all those many beings equally after all. If you'd apply some transitional valuation function the math works out a bit differnt as each add-and-redistribute step adds a little bit less value - because the added being is more distant to you after all - even if only a very small bit.
I think this model is more honest to what humans really feel. Societies opinion may differ though.
In population ethics...
Most people start out believing that the following are true:
Some will baulk on the first statement on equality grounds, but most people should accept those three statements as presented. Then they find out about the mere addition paradox.
Someone who then accepts the repugnant could then reason something like this:
Call this the "differential" (or local) way or reasoning about population ethics. As long as each small change seems intuitively an improvement, then the global change must also be.
Call this the "integral" (or global) way of reasoning about population ethics. As long as the overall change seems intuitively a deterioration, then some of the small changes along the way must also be.
In general...
Now, I personally tend towards integral rather than differential reasoning on this particular topic. However, I want to make a more general point: philosophy may be over dedicated to differential reasoning. Mainly because it's easy: you can take things apart, simplify them, abstract details away, and appeal to simple principles - and avoid many potential biases along the way.
But it's also a very destructive tool to use in areas where concepts are unclear and cannot easily be made clear. Take the statement "human life is valuable". This can be taken apart quite easily, critiqued from all directions, its lack of easily described meaning its weakness. Nevertheless, integral reasoning is almost always applied: something called "human life" is taken to be "valuable", and many caveats and subdefinitions can be added to these terms without changing the fundamental (integral) acceptance of the statement. If we followed the differential approach, we might end up with the definition of "human life" as "energy exchange across a neurone cell membrane" or something equally ridiculous but much more rigorous.
Now, that example is a parody... but only because no-one sensible does that, we know that we'd lose too much value from that kind of definition. We want to build an extensive/integral definition of life, using our analysis to add clarity rather than simplify to a few core underlying concepts. But in population ethics and many other cases, we do feel free to use differential ethics, replacing vague overarching concepts with clear simplified versions that clearly throw away a lot of the initial concept.
Maybe we do it too much. To pick an example I disagree with (always a good habit), maybe there is such a thing as "society", for instance, not simply the total of individuals and their interactions. You can already use pretty crude consequentialist arguments with "societies" as agents subject to predictable actions and reactions (social science does it all the time), but what if we tried to build a rigorous definition of society as something morally valuable, rather than focusing on individual?
Anyway, we should be aware when, in arguments, we are keeping the broad goal and making the small steps and definitions conform to it, and when we are focusing on the small steps and definitions and following them wherever they lead.