Even without Prop 13, this problem still applies, and is inherent to real estate.
Buying land is essentially buying a monopoly (since land is in fixed supply), and getting access to its rents for perpetuity. Prop 13 gives you even more of the rents, but in places with Prop 13, property taxes are low enough that most of the rents still go to the landowner.
You can compare land to taxi medallions, and see that all the reasons taxi medallions are bad also apply to land. Allowing indefinite ownership of the rents from a scarce resource essentially gives a slice of the future productivity of the community to those who were lucky to buy early enough.
EDIT: also, why prop 13 applies to non-residential real estate is another issue.