I would understand that in Europe, where it can be difficult to fire people, but in the U.S.? (In my country, we have like 3 months notice period, but also 3 months test period, during which employment can be terminated at will from both parties.)
And in fact, I got my first job - at larger American company - exactly like that (including the coffee, which my interviewer - an older director of the development center I was hired to - almost didn't finish). Well, it actually was a bit more complicated, there were two stages. But I think it's just balls.
If you say getting rid of bad employee is difficult, isn't replacing that with a difficult process, through which everybody has to go, actually less efficient? Isn't it kinda like forcing everybody who buys a DVD watch those commercials about piracy?