It makes sense when you think about their business - because banks are extremely pro-cyclical, they need an 'out' to reduce compensation when their profits blowup or economy turns. Easiest and quickest to drop bonuses.
[edit] Saving 10K on a programmer, even multiplied over 1000 programmers isn't going to amount to a hill of beans in a crisis where the bank is at risk. My suspicion is that tech management at banks have adopted this system because they're failed middle managers and it helps them pretend that they're BSDs with the ability to swing pnl.
To back this up, I can draw on the experiences of my friends and former colleagues across the Street, and a large number of hair-raising interviews at other banks that made me repeatedly wonder why I would trade in the devil I know for a dumpster fire.
At the end of the day though, "the best in class" is still not "good".
I guess it's better than the "unfunded pension because they don't come due for 50 years when we'll be totes making bank" approach...