This. Once an account goes inactive, it essentially doesn't exist until the person returns. They don't hurt you, nor do they help you. They're just... there. Booting them hurts you, leaving them be does not. Everyone thinks inactive accounts contribute to decay, when that's a fallacy.
As far as what the incentive for recruiting a bunch of noobs and then booting them at level 100, it's pretty simple: Free labor. You have a hundred newbies do all the work for you and then boot all the people you don't like to have your core small guild of close friends while keeping all the nice amenities. You retain 3/4 of the work all your minions did, so this is precisely why Turbine needs to reevaluate the penalties for booting people.