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Theres a very simple answer to that: The things you are mentioning (height, weight, arm-span, testosterone levels) are not normally distributed in the human population, but follow a binormal distribution. It makes sense to let people from one of the two parts of the distribution compete within their own bell curve. It makes far less sense to set a cutoff at the tail of the curve and disallow people from the tail from competing.
Its simple? Okay. Tell me the exact “allowed” physical parameters for any sport.
Since it’s simple, these should be well defined and easy to source.