It can help reduce jealousy between colleagues. How would someone feel knowing one of their other colleagues who just so happened to be a better negotiator is getting paid possibly much more than them, despite apparently similar skills/work?

I disagree profoundly.

Source: I had so many discussion where someone complained about x getting a company car. I would not be in favor of them knowing the contract I have with my employer.

Companies can abuse this fact, out of question, but there are so many other factors involved, that it doesn't seem worth it to me.