Even here on HN we'll regularly witness people proudly proclaiming that they've tipped 50% or more for "good" service. Not content with showing off their status to whoever had the poor fortune to be dining with them, and the waiter/waitress that served the group, they also relish in the opportunity of soaking randoms online in their lavishness post-factum.
Paying more in taxes or increasing the minimum wage doesn’t have the same effect, even though it would result in a more egalitarian society. The power to select who received the benefit from you is important.
Deliberately overpaying is a bad thing when you're either feeding a company or gifting a stranger, neither of which need the money anywhere near as much.
The only way to end it, is if we all collectively decided to stop the practice so that waiters could negotiate a real wage.