Variance reduction isn't the direct reason we lock away people or restrict their opportunities; personal and public safety is. So a serial killer is hunted and imprisoned, and work is done to detect would-be killers before they kill. Variance, however, is a safety issue in many areas - e.g. gun ownership, police service, flying, driving. So we have psychological evaluations not just to weed out the individuals obviously incapable of handling a task safely, but also the highly unpredictable ones.