Well you could be pushing people to only be about themselves and their team and not the company as a whole. Why would I want to work with and help another team if it means I may move them above the 10% line and me below?
So while you're right that it would push people to do their job well it could also push them to submarine others.
The point is that companies shouldn't waste a lot of time trying to salvage or put up with people who aren't helping them succeed. If a person is hovering around the bottom 10% and they think the solution is to screw someone else over, they probably should go. I know I wouldn't want to work with them.
So while you're right that it would push people to do their job well it could also push them to submarine others.