Stack ranking and related schemes are so obviously going to be gamed, will definitely measure something other than the nominal thing, and will gum up the works. It's one thing to have a Hunger-Games-style hiring process. Bad as that is, there's an expectation that once you've passed those trials—once you're hired—that you can then devote your time to building things or leading a team that builds things.
But when it extends into quarterly or annual reviews, where there must be a loser, then of course it will serve as a distraction from accomplishing actual goals and doing useful work. Now you have to spend time managing your image, making sure you don't piss off the wrong peer, and choosing assignments that are trendy.
Companies try to avoid all of that by adding even more complexity to the review process. More layers to prevent favoritism, more concrete metrics to sidestep subjectivity, a longer list of metrics to mitigate any one of them being over-weighted.
This just means more time and attention is stolen from productive work, and directed instead toward image management and politics.