as a complete outsider to peer reviewing and academic journals, this sounds like that scene from "office space", the "what is it you'd you do here?", one.

Journals don't "do" anything, but the professors, PIs, postdocs, etc are evaluated for jobs or promotions based on the "quality" of their work approximated by the "quality" of the journals they were able to publish in. A Nature or a Science paper gets you a lot more than an arxiv preprint (in most fields, anyway). My best bet is we need a new way of evaluating scientific work, without relying on proxies like journal impact factors. Not sure what those might be, probably depends on the field.