Firstly, no two people are exactly alike. Everyone has an individual "spirit" - i.e., unique approaches to different issues. Even if we personally disagree with them, it's important to allow others the freedom to express these perspectives. Part of why we are so unique as a people is because we are not a monolithic group. As David Ben-Gurion correctly observed, where there are two Jews, there are three opinions. So when Moses was making reference to the "God of the spirits of all flesh," he was talking about God's knowledge of the intricacies of each person's unique views and personality.
Consequently, a leader is needed who understands how to treat each person according to their own "spirit." A true leader is not someone who engages in nepotism or disregards those who disagree with him. While it would have been completely understandable for Moses to incessantly push for his own son to be the next leader, he cared more about the right man leading the Jewish people. Joshua was chosen because God knew that he was a man who had the ability to tolerate - and therefore lead - a diverse group of twelve tribes.
Unfortunately, many of the religious and political leaders of today do not meet the above criteria. They often go out of their way to quiet others. They often engage in appointing people to positions of authority because they are friends or relatives - not because they are the most qualified. And perhaps more than anything else, they often have trouble putting their egos aside for the sake of successfully leading those around them.
In other words, the Torah's approach to leadership brings to light what many of today's leaders would rather keep in the dark.