Inequality can be a cause of suffering, as it can price average individuals out of essential, limited resources like power, land, and skilled labor. For instance, some combination of skill and knowledge held by a few scientists could be applied to develop technology that improves the lives of millions or to create luxury entertainment for a handful. In an environment of extreme inequality, the concentrated wealth of a few elites can more than the wealth of a million average individuals. Because of that the rare talent is more likely to be used for entertainment purposes.
That's completely counter to how capitalism actually works in practice. With every luxurious technology reserved for the wealthy there are always inevitably improvements in scale and delivery that make these luxuries accessible to the masses. Cell phones, cars, internet access, food delivery service, chauffeurs (in the form of Uber), airline travel, etc all used to be luxuries of the rich. In a short time, prices came down, and became accessible to most people.
Most of the wealthiest people in the world made their billions by selling something used my millions or hundreds of millions of people.
The same thing would happen by focusing on technologies that improve more lives right from the start. Instead of cars we'd be developing better public transit, instead of food delivery we'd be developing ways to deliver food to the people who actually need it, etc. Developing luxury goods and hoping it'll at some point benefit the public is an inefficient way to improve lives.