Software engineering (and many other parts of IT) is at its core a creative process, and the “coddling” is what creates an environment where creativity becomes possible. You can’t get into the zone/flow if you’re constantly worried about who’s trying to screw you over, or when you feel you have a gun to your head about some metric you need to hit.

Of course those things are going to happen, this is work after all, but the idea is to try to reduce those things as much as possible. Many of those benefits are made with that goal in mind, and employee retention just follows from having a good environment. IT people are happiest when they can get into flow and work on something really cool, and will move to other companies who provide that environment.