My gut feeling is that allowing this at a workplace is a (rather perverse) variation of the "employee of the month" nonsense. I.e. instead of rewarding your subordinates monetarily, you give them a power to bully their peers, but not to compete with yourself.
It is also useful in pushing out "troublemakers". People that will not call BS on the unsubstantiated political claims are also less likely to call out corruption/nepotism/inefficiency of the middle management.
In the long term the company will stagnate and die, but we live in such a wonderful time of government bailouts, low interest rates and desperate investors, so it may take a long time to unravel.
It is also useful in pushing out "troublemakers". People that will not call BS on the unsubstantiated political claims are also less likely to call out corruption/nepotism/inefficiency of the middle management.
In the long term the company will stagnate and die, but we live in such a wonderful time of government bailouts, low interest rates and desperate investors, so it may take a long time to unravel.