I think that's fine for the employee (great, really: long-term paid vacation!), but if the goal is to create the "next Silicon Valley" or whatever, then allowing paid non-competes is going to work against that goal. You want an employee to get excited about striking out on their own and starting a company, immediately after quitting their old job (or, hell, before quitting their old job, as some SV founders do). Allowing their previous employer to delay that by 6, 12, 18 months (or whatever) isn't great for the entrepreneurial spirit.