In short bursts, I think the diminishing returns of long hours is sorta overblown. Over the long term, 16 hour days will wear you down and destroy you.
I work in a big law and 16 hour days are too common. But people are successfully managing billion dollar deals and litigation while doing 16 hours fairly often.
But over a long period of time it takes a toll emotionally and physically.
One problem with organizations that bill by the manhour--law and consulting--is that even if the employee output diminishes, the firm still bills the same rate. There isn't a lot of incentive to keep your employees heads fresh.