Labeling is certainly the job of ego and it's good to prevent it from doing it because we can get egoistic - egoism and ego is not the same thing! Egoism is when somebody only wants to take and don't want to give anything at all. But ego doesn't has to be egoistic.
As I said without ego you wouldn't want to be better because you wouldn't want anything at all. You wouldn't want to act because you would be just so happy about how it is that you wouldn't want to change anything. Only because we want or we disagree on how the thing are we can actually change ourselves and become better. Of course the point isn't to become better than somebody else but being better than yourself from the past so you'll have more to offer to the others - as you said.
Without ego you wouldn't be able to potect anyone because you would feel too weak to do so. You would say to yourself "how poor me can do anything, I'm so powerless and weak...". In case like this ego would be the first to react "come on! move your ass and do something with that!".
Spiritual growth is mostly about serving others. When we do we can learn a lot more than just following our own needs which are mostly egoistic. That's why I said to starve ego. By starving it I meant feed it carefully so that you'll be self confident but you wouldn't have to prove anything to anyone. And I totally agree with the knowledge part - what is the sense of gathering it and then taking it with you to the tomb? It's mostly egoistic because you don't want to share. You become egoistic when don't control ego which says "I want it, I want that". And it's the voice of ego which says "dont's share with him because he might become better the you and your the one who want to be the best". Because of ego we want to rival but because of it we want to archive as well. So when you starve your ego properly you'll be like - I want to archive but in cooperation for the sake of me/ someone particular/ whole society.