If it turns out that one manager is giving consistently higher scores than another and can't support it, then it seems quite reasonable and fair for there to be an adjustment down.
This is just my understanding of the process, based on comments by people involved in various stages of it, many years ago. Maybe I misunderstood, or maybe things have changed. It wasn't a perfect system either, people with a bad manager who can't argue their case could still get screwed. But despite all that, the calibration scores never felt like an adversarial process. Certainly nothing like some of the MS stack ranking horror stories.
As for why anyone works for Google - as a recently ex-Googler, I can answer that. Most of us don't think about it at all. The calibration scores are hidden from us, and they only have observable effects once a year when bonuses and raises come out. And most Googlers are paid ridiculously well anyway (don't we have an article on HN about Bay Area gentrification every few days?), and typically would be working in finance if they cared about maximizing financial payout. So people work for Google because they want the other things Google can provide - challenging technical problems, smart coworkers, the chance to impact millions of users even in a tiny way - and it doesn't particularly matter what management thinks of us.
Compensation was a small part of my decision to leave. I left because I felt that I had learned everything I could learn at Google, and the stuff that I did want to explore and learn about could only be done outside of the company.
It is really hard to fire federal employees, even if they are drunk on the job, make racist comments about customers, call their supervisors degenerates, refuse to sell stamps that are in-stock, or just hang out in the corner chatting while a line of people stretches out the door.
Not having "decent labour legislation" is a result of "Americans tolerating it". If Americans didn't tolerate it, they'd have legal protection against it.
I suspect such attitudes are part of the whole mindset; corporations first, then the rest of us mooching, non-job-creators.
Edit: Unless you're being sarcastic, in which case I remind you of Poe's Law.
Of course, its intensely and inextricably political nature means it's doing something else, and the true insanity comes when it's done indefinitely and fundamentally changes the corporate culture.
Hard to imagine Google staying competitive if it really takes hold....
(As for the "nobody ever got fired, Steve Ballmer or more likely the board that fired him might disagree....)
Being from Ireland myself, it amazes me that Americans tolerate stack ranking, grading on a curve, and t-scores - tools whose statistical utility has been obviated by the abandonment of all other contexts.