By definition if there is a better way of segregating sports than by sex/gender, then that would be good. But I don't know what that better way would be.
One of the issues is that if you segregate by some proxy for physical capability, then you will nearly always be relegating women to a category that is by definition not the top one. So even at an elite level the best a woman would be able to achieve is, e.g. fastest woman in one of the lower-rated leagues, not the fastest woman in the world. (Men's boxing is a useful example here. I'm no expert, but I have at least heard of some of the boxers in the heavyweight class; I've not heard of any in the lighter classes. So you'd probably be limiting women to lower prize money, sponsorship and recognition.)
Another aspect - and this is really where I'll probably bow out to avoid speaking 'for' women - is that at a non-elite level, some women's sports exist partly just as something women can do by themselves, without any men being involved. So you'd have to think about the consequences of eliminating segregation by sex/gender across the board, or at what point you would introduce it (and on what justification).