In our world, we consider human life to be precious and valuable. It is meant to be preserved, and a deliberate act of taking a life is considered deplorable by society. This is considered normal.
Only within certain contexts. Some consider the unborn to be exceedingly precious, more precious than the poor and destitute. More precious than criminals. Others see this issue differently.
We have and use the death penalty. Would it be so far fetched to imagine some of the people, within our modern day, watching an execution and thinking that it is a sacrifice to God?
The people of this setting also consider life to be valuable, as it was given to them by the gods. As it is precious, human life is the only thing worthy of being sacrificed to them. This continent is controlled by a theocracy where self-sacrifice is revered and promoted. The gods demands tribute from their people, and being sacrificed to them is the highest honor one can achieve. However, only a select few are worthy of such honor.
We here on Earth also honor self sacrifice. Not to the point of death except in acts of heroism, in which case certainly to the point of death. So far, in broad strokes, you are talking about a matter of degree between what we are used to and your world.
Slaves, the destitute, and average people are not applicants for this. The gods want those of merit, who have great potential and have proven themselves through competition. This is done through ritual games similar to our Olympics. These games are often dangerous where warriors or athletes from respective states go up against each other. Those who survive will meet each other in a final contest where there can only be one winner. All those who die in these games would be honored by their families and society as heroes who defended the pride of their nation. However, the winner will be given the ultimate honor of having their hearts removed and their soul offered to the heavens, where they would achieve godhood. Because of these games, outright war among nations has been avoided for millennia.
Vaguely bizarre, but OK.
The religion demands for society to kill off its best people routinely,
This is a problem to me. Why is athletic, healthy, and rich deemed 'best?'
but I don't want to portray it as evil. The people and their leaders genuinely believe in what they are doing, and they have normal rules against murder and crime, etc. These events also keep the peace on the continent, as these war game rituals have taken the place of war and conflict. How can I get this across to the audience?
To answer your question, you do it by comparison. You provide explicit examples through backstory, written history, oral tradition, swear words, whatever--that points to the thousands upon thousands of lives lost before the tradition was begun.
I see little in your setup that is very far removed from American culture. Some people here wish to die. Some wish to be heroes. Life is only valued under certain circumstances. In some ways, your society is more moral than American culture because your society is keeping warfare at bay.
I'd play up that angle. I'd go toward 'on the nose' and have a character describing how there used to be barbaric cultures that would drum up wars over lies, over resources that were better left alone, over ego, and that these wars would last generations and divide the country more insidiously than anything else the country had ever faced before. that war became the economy. That its funding was held separate from the national budget, because it held a protected status as 'necessary.' That it became a god in its own right, and people prayed to the god of war for victory. And your character can make the philosophical argument that the good of the many (and the fabric of the culture) outweighs the good of the one. And besides, who doesn't want to be a god? And, if he achieves god-hood, he may even be able to end this dastardly game and to warfare.