The company should not be making these decisions. If the company feels that the employee is not productive the company should fire the slacker.
I worked for one law firm that had mandatory vacation. After arguing I finally took the vacation used the time to find another job and never went back. I didn't even tell them I quit. They figured it out.
It's less about productivity and more about concern for us as people, valued co-workers, and friends. If this were a big corporation with hundreds of employees and I had passed maybe two sentences of conversation with my boss in the last six months, then I would agree with you that it's none of their damned business. But it's actually not uncommon in small businesses where a handful of people work very closely together every day for it to take on more of a family vibe than a work vibe.
When I started here a year ago, there were three more employees than there are now. All three got tossed for slacking - which is a very different thing from burning out - and the responsibilities of two of them got folded into my job, rather than us hiring replacements.
On the other hand, those of us who meet the standards for staying get treated very well and the management is very concerned about holding onto us.