@Horton - Yes real thing. Its the way beach volleyball tournaments have been run for decades (minus the handicap part).
Double Elimination = you ski until you lose twice. Winner stays in the "Winners Bracket" and competes against the winner of the next match. Loser drops to the "Losers Bracket" and competes against the loser of the next match. If you lose in the Losers Bracket you are eliminated. Final match is the winner of the Winners Bracket v the Winner of the Losers Bracket. The winner of the Losers Bracket would have to beat the winner of the Winners Bracket twice to win the tournament. Losers Bracket skiers ski twice as much as Winners Bracket skiers if they advance so there is an element of fitness involved. Attached is an example of an eight skier set of brackets.
Handicapped = any handicap system that works to make the matches competitive - it could be scoring all max speed skiers at the 34 mph buoy count like your cash prize event, or something based on zero based scoring. There would need to be a tie breaking rule. For high level tournaments it can be eliminated.