> if you can properly measure your output, this time-based race to the bottom shouldn't be an issue, it becomes an output-based race to the top, and there's nothing wrong with that, you just bow out of the race when you reach your work-life balance.
True, but the assumption is false. As an industry we're terrible at measuring outputs, and sadly this causes management to fall back on measuring inputs.
And even that, you don't get a free choice of. Working 75% as long as the rest of your team doesn't get you 75% of the salary, it gets you fired.