Slate does a quick and dirty job of making it. It basically boils down to cost, complacency, and rigidity.
For one, they estimate that it costs a university $10-12 million to tenure a professor for their entire career. They point out that once a professor is tenured they never have to produce a single additional piece of compelling scholarship. And they argue that having a rigid 6-year clock to either earn tenure or get the hell out forces new professors to follow a formulaic model of production that discourages creative thinking and dedication to teaching.
All of these arguments have been made before, and in more detail, in other places. If I find a link I'll add it. Personally, I don't think tenure makes much since from the university's standpoint, but it's a professor's dream. I honestly think tenure at the University of Chicago is the single most awesomest job an academic could have. Top salary + Top 5 city + Top university = Holy Grail. I suppose you could make a case for Harvard, being that Boston is a major city. But who goes to kick it in Boston? No one I know.
Of course, the fact that I'm getting my degree from the U of C (... I really am... and soon... I promise...) means I have a 0% chance of getting a job there in the next 10 years. But that's cool. I plan to grow old in Chicago. If I have to run some quick errands out of town, it's no biggie. I'll be right back.
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