There is a long tradition of great thinkers trying to imagine Utopia - an ideal world that we should all strive to make real. Plato's Republic is one of the earliest examples, and Thomas More coined the term Utopia for his 1516 book of the same name. This in itself is a good thing - it's hard to create a better world if you cannot imagine what it might look like. The problem arises in the compromises we make trying to get there.
It arises in a number of philosophical systems, but the one most susceptible to this Utopian Thinking is Utilitarianism. In Utilitarianism there are few absolutes, few taboos that serve as brakes to temper actions. You are aiming for the least suffering and the most pleasure across all the people who are affected by the action - but in service to that goal you can, at least theoretically, do anything. That may mean some very harsh localised pain for a broader good - for example, it is acceptable to kill a person if it will stop them from blowing up a city (though it would be better to stop them without killing them).
In Deontological Ethics like that of Immanuel Kant, there are things which are absolutely forbidden, regardless of the particular circumstances. One commonly-cited example of this is if a murderer were to come to Kant's door looking for the person they wanted to kill, Kant would not be able to lie to the murderer - because to Kant, lying is an absolute moral wrong. Kant could still refuse to answer, but nonetheless there is little regard given to the direct consequences of an action - lying is, always and everywhere, wrong. You can see how this puts a brake on things getting out of control - these taboos act like roadblocks.
Nonetheless I do think Utilitarianism is the ethical system we should be moving forward with, precisely because it gives regard to individual circumstances, so Utopian Thinking is a problem that needs addressing. Because while calculations like [1 bomber] vs [1000 civilians] are relatively straightforward, any time you add an infinity into the equation it becomes nearly impossible to solve. Absolute happiness for all, a perfect society...with these on one side of the equation you can justify pretty much anything on the other side.
I've been learning about the history of Communism lately and this seems to have been one of their biggest problems. They thought they were building the perfect society - so with that on the line, "discipline" is a small price to pay. So is a few years of exceedingly harsh working conditions until modernity is achieved. So is the killing of anyone who threatens the revolution by dissenting. The rhetoric of the Stalin years specifically stated that the Party was the vanguard, leading the way through difficult times on the way to a perfect society - this notion of a time of heroic sacrifice preceding paradise was embedded into the dogma.
This is not to say that the oppression of High Stalinism was all down to some misguided people with good intentions - obviously there were a lot of massively corrupt people at every level, and a lot of people who would twist the ideology for their own gains. But that's the point - this revolutionary, absolutist dogma lends itself to Utopian Thinking, which in turn justifies horrific atrocities.
A more relatable example, perhaps, is with medical research. Nowadays we have pretty strict ethical laws surrounding what you can and cannot do in the name of science - making sure we have informed consent, not doing harm unless absolutely necessary, etc. A rookie Utilitarian might question this - surely if we can save or improve billions of lives in the centuries to come, we have an obligation to do whatever it takes? Surely the pain of a few now is nothing compared to the pleasure of billions later? But of course the answer is no - we will always have problems to solve and taking that shortcut will always be an option, so the "pain now" phase will never end. We can (and do) make excellent progress without needing to harm people in the process.
This is as opposed to the quintessential case of medical sacrifice - causing pain by surgically operating on somebody in order to save them from a larger pain later. In that case, there really is no way (with current technology) to do good without harm, and there is a discrete period of pain for an explicit gain, rather than open-ended, indefinite pain for a hypothetical gain.
To return to economic systems, we need to think of Capitalism in these terms as well. The inequalities of Capitalism are often justified by the idea that we need this system of monetary rewards and market-based efficiency to ensure humanity increases prosperity and advances technologically - it is similarly Utopian Thinking. There's no doubt humanity is advancing through these measures - to return to our example, medical science is doing incredible things now - but the human costs are largely inflicted on the poor and the benefits are concentrated in the hands of the wealthy - we may have great medicine, but it's of little use to those who can't afford it.
Late Capitalism is less oppressive than High Stalinism but there is less of a gap than you might think - Bangladesh is our Road of Bones, so in many ways the oppression has just been outsourced. We might say that this is just a temporary sacrifice, and that one day these benefits will be available to all - but when? We have been saying that for a long time, and I don't foresee a time when the 1% will say "You know what? We've got enough money."
This, really, is the problem with Utopian Thinking - you can't keep deferring forever. Utopia, etymologically, means "no place" (it is a pun on the Greek for "good place") and this is apt - perfection is one of those things that, almost by definition, cannot be reached. Imagining what the ideal world will look like, a la Plato, is a good idea, because we do want to know which direction to head. But as I've said before, designing Utopia from a distance is an incomprehensibly complicated task, so what we need are incremental steps with clear benefits. It's as much about the process as the end goal. We need to shed this idea that we (or more accurately, someone else) must sacrifice to get us to that perfect world that's just around the corner, and start focusing more on making our own world more equal now. We cannot keep these benefits on the never-never - because otherwise we will spend eternity in this same pattern.