I think it does the opposite. It allows people to have random conversations out of the way without detracting from the on-topic discussions. It also gives the modes options other than the ban-hammer. Rather than telling people they can't say certain things, you just ask them to take their discussion where people are interested in it. Good boards (not Reddit) allow mods to move threads to more appropriate sub-boards instead of just deleting or locking them. The additional scope for organizing discussions allows more people to participate.