Sure, maybe they are good at getting right to work. But then they are gone and all that institutional knowledge goes with them and you have to start over with someone else.

There is a lot of value to having long term employees that have been around and know what is going on.

This is why a documentation culture is so very important. Even on the best terms, the average tenure of a tech employee is two years. That's just today's economic reality. As a leader, a project should not be considered 'done' until its documented to such a level that a well-meaning new employee can come in, read the docs, and be mostly up to speed with at least the daily 'care-and-feeding' tasks and the top 5 failure modes.

There is a lot of risk of long term employees entrenching bad practices by leveraging their political clout due to seniority. In some ways that's worse than the scenario you describe.

Shouldn't this argue for everyone having long tenures, since it's unlikely you'll actively fire competent employees just because they started at their job too long and got too well trusted.

Having a few long term employees and a bunch of short term ones is the worst case scenario, since it only accentuates the disparity in company-specific reputation and clout.