The arguments for academic tenure have always struck me as pretty weak, and more to the point, transparently self-serving. The best you can say of the system is that it preserves a sort of continuity in schools that is desireable for the purposes of cultivating alumni donations. But the cost of such a system is simply staggering.
Consider what the academic job market now looks like. You have a small elite on top who have lifetime employment regardless of how little work they do. This lifetime employment commences somewhere between 35 and 40. For the ten-to-fifteen years before that, they spend their lives in pursuit of the brass ring. They live in poverty suck up to professors, and publish, for one must publish to be tenured. It's very unfortunate if you don't have anything much worth saying; you need to publish anyway, in order to improve your chances. Fortunately, for the needy tenure seeker, a bevy of journals have sprung up that will print your trivial contributions. If nothing else, they provide a nice simple model which helps introductory economics professors explain Say's Law.
At the end of the process, most of the aspirants do not have tenure; they have dropped out, or been dropped, at some point along the way. Meanwhile, the system has ripped up their lives in other ways. They've invested their whole youth, and are back on the job market near entry level at an age when most of their peers have spent ten years building up marketable skills. Many of them will have seen relationships ripped apart by the difficulties of finding not one, but two tenure-track jobs in the same area. Others will have invested their early thirties in a college town with no other industry, forcing them to move elsewhere to restart both their careers and their social lives. Or perhaps they string along adjuncting at near-poverty wages, unable to quite leave the academy that has abused them for so long.