Let me give you an example of why an employer might do this. Understand that this is an example ONLY - I am not suggesting that you or your co-workers would behave similarly.
I work for a small hotel. Because of the size of the hotel, we have only one person on duty at the front desk at any given time. Each desk clerk has, for the eight hours of their shift, complete and sole control over the reservations system. While there are back up procedures in place as well as a series of check and balances, they are not foolproof.
There is currently one desk clerk whose performance is unsatisfactory to say the least. In addition to that, her attitude leaves much to be desired. She just had her review yesterday and we were fully prepared for her to quit in a huff. Had she done so, there is NO WAY we would have let her work out her notice. If she chose to be vindictive, it would take about two minutes for her to destroy the records of several reservations. While ultimately the back up systems would reveal what had happened, if she was careful about which ones she removed, we'd never see the backups until she was long gone and the guest was standing at the desk looking to check in.
In a previous job an employee who was terminated for good and valid reasons was given 15 minutes to collect her personal belongings. In that 15 minutes she destroyed several key files, did $2000 worth of damage to a computer and canceled the travel reservations for all of upper management for the remainder of the calendar year (it was October). Believe me, those men and women did a LOT of traveling.
An employee who either rightly or wrongly believes they have a grudge against their employer can do a whole lot of damage if allowed to do so.
Additionally, there is the question of loyalty. If you have, for example, a sales job, and you give your notice to company ABC in order to go work for competitor DEF, during the notice period which company are you going to be more concerned with? The one who will only owe you one more paycheck or the one you will be around with for the long term? Are you going to try to sell ABC's product during that two weeks when you'll be responsible for selling DEF's product, possibly to the very same clients, less than a month later? ABC might well worry about that.
