It's assuming that that merge conflicts will never be too difficult, and people won't make mistakes in resolving them. If so, too bad, the original commits are lost by the rebase process. (They might or might not be kept in any given clone. No guarantees, good luck trawling through the reflog.)
It's corrupting your database because it makes the UI for exploring it nicer.
This is the opposite of what we should be doing! If the truth is messy we should build better UIs for exploring it. Add additional information on top of the true history, allow people to group and describe commits. Add more information to get the UI that you want, rather than destroying information because it makes things look cluttered.