Sure, diminishing returns kick in but monitors are cheap and programmers are expensive. It's the same reason that 16+GB of ram and SSD's are worth it. Not because most people need it but the cost is low enough that the productivity gains need to be minuscule to be worth it.

aka Assuming monitors last ~3 years and cost below 2,000$ it takes a tiny difference to be worth it because your not just comparing productivity delta's but also cost delta's. In other words a 2,000$ monitor that improves productivity by 1/20th of 1% than a 1,000$ monitor is clearly worth it over 3 years even if the difference is simply eye strain. 3x (salary + benefits + overhead) * .0005 > 1000$.

PS: Another way to look at it is spending an extra 1-2k per year on salary over industry standard rarely tempts programmers but an extra 1-2k per year on hardware might.