This seems shortsighted. It's optimizing for what's easy to measure (sign ups) over what's hard to measure (brand, customer satisfaction, word of mouth).
Play stupid games, win stupid prizes. That’s why the Facebooks die and the Apples and Googles last.
This is likely true, but only if there's an X. Facebook's growing sign-in box as you scroll down is not easily clicked away from.
You see videogames employing these psychological tactics constantly nowadays to completely min-max human behavior into spending money.