While I agree in principle, in practice it can be very helpful for short-term positions like postdocs. Of course, you might argue that the very position of a postdoc and the whole carrot-on-a-string tenure apparatus is exploitative and immoral and… well I wouldn’t disagree :)

Yes and no. It depends on why they're doing it.

The military, for instance (and this is similar to what I've seen at some colleges), have housing for people at different grades. Dorms for younger enlisted troops, houses for families, and houses for specific ranks/positions like a base commander. There are a few reasons for this. One is historical (a lot of bases weren't near housing options), another is control (the dorms), another is community. By being on the same base with each other everyone is part of the same community. You can see a bit of disintegration (at least for USAF) with the decrease in state-side housing (or the use of it). They aren't around each other as much, their families aren't friends with each other in the same way as last century, they have no real sense of community (the troops may, but not the wider population of troops + family, this is also uneven, some subgroups haven't been impacted in the same way as others).

What I've seen at some colleges (more accurately, saw) was similar to the rank/position housing and also trying to help with creating a community at the college. The former can make a lot of sense, and is hardly dystopian. College president hosts a lot of events and gets a house suitable for it on the campus. With both them and other faculty members it keeps them on campus as part of the community, rather than turning college professor into a "job" (a thing you commute to and do your 9-5 and then go home from, again, see the disintegration of the military community in the US as an example of something you sometimes want to avoid).

Also, college campuses don't move very often. Since cities don't stop growing the housing around the campus can become very limited. Forcing people away, out into the suburbs. Whether you just want them to have easy access to the campus or want to try and create a real community, having campus housing can mitigate this issue.

It becomes dystopian when it's subpar housing, comes with pay cuts, or is mandatory (especially without at least a decent reason like: The president should live in the president's house).

"Dorms" LMFAO

obviously never visited a barracks.

https://www.whiteman.af.mil/dorms/ (and even if other branches don't use that terminology, "dorm" is also a general word describing many shared living environments)

I could've listed barracks too, but there are also dorms. Maybe that's mostly USAF and officers in the other services though?

Sure, a bit, but by doing this they also ensure that elderly professors can get to class without transit.

Not so much an issue in Berkeley, of course, but makes a ton of sense for schools where heavy snowfall is a thing. School get canceled most often because professors [and employees] can't safely get to campus due to weather -- individual professors getting sick isn't enough to close the entire school.

The housing units are less about housing of employees and more about parking of endowment coin in real estate investments. All the cool colleges do it to some degree.

If rural institutions didn't offer faculty housing real estate prices would be even more out of whack than they are now.

It depends but university housing is a godsend especially if you're a postdoc or another type of visiting academic.

Korean companies do this all the time.