From my understanding Wikipedia adds nofollow to stop incentivising people from constantly trying to sneak links into Wikipedia to boost SEO.

Any ranking system that gave any value to links would suffer this problem.

nofollow is a necessary evil if you allow untrusted sources to publish content on your site that contains links. It's a way of saying "I don't vouch for these links in the same way I vouch for other links on my site".

Sounds pretty reasonable to me.