We have always understood that Zakaat is not permissible for Sayyids.

Answer

The actual mas'alah is that it is not permissible to give Zakaat to Sayyids. Rasulullah (Sallallahu alayhi wasallam) himself described Zakaat as ausaakhun naas (the filth of the people).

When a man is in dire straits of starvation and nothing halaal is available, then consuming some pork becomes permissible. This same principle applies regarding Zakaat for Sayyids. If Muslims who have millions and billions to waste on haraam weddings, festivals and touring in the name of mock umrahs fail to execute their Waajib duty of assisting destitute Sayyids with Lillah funds, and the Sayyid is undergoing great hardship, then solely because of the villainy of the wealthy who refuse to honour Rasulullah (Sallallahu alayhi wasallam) will it be permissible for a Sayyid to accept and use Zakaat. For him it will be the lesser of the evils.

But as far as the wealthy man is concerned, he will be sinful for giving Zakaat to a Sayyid when he has millions to squander on luxuries and haraam. Despite the permissibility for the hardpressed Sayyid to accept the Zakaat, the Zakaat obligation of the miserly wealthy will not be discharged. There is no valid reason for the wealthy to withhold giving clean and Lillah money to destitute Sayyids. Their claim of loving Rasulullah (Sallallahu alayhi wasallam) is hollow and hypocritical.

The technicalities presented by today's muftis do not cancel the original law of prohibition.