Corporate incentives are weird. Firing people is tough. If you don't force it, people find a way to just go along with the status quo. If you let them, managers all report that their teams are just super high functioning. And that path leads to mediocrity. Just like how the peer rating system devolved into bland platitudes.
From an executive's standpoint, where you are looking at thousands of individuals with no way to tell, I completely understand it.
And you accept that some unfairness will happen. People will be fired because they happen to be the lowest on a high-ranking team. You accept that's unfortunate, but the alternative is worse.
One reason your soccer analogy doesn't apply to a corporation is the scale--sports teams have a few dozen members. It's possible to know them all.