>The problem is people become more concerned with the artifact than what the artifact is supposed to be communicating.
This can happen to any formal reporting or management system. Status reports, especially frequent ones, are actually one of the less game-able systems out there. Though they really need to be augmented by more automated recording and reporting of measurables to help keep them honest.
I completely agree that they are a poor way to manage. The problem is people become more concerned with the artifact than what the artifact is supposed to be communicating. Eventually, the become nothing but noise and lost time. Managers feel good that the artifacts are being generated, but the underlying problems are being ignored.