Because it doesn't take time. I have a friend here at Carnegie Mellon that has a 4.0 GPA, got 3rd at ACM ICPC World Finals, and also took the 3 hardest classes this university has to offer, as well as double the average course load, all in the same semester. And he still got 9 hours of sleep a night.
By all means, I'm nowhere near as smart as he is and I personally can't do that, but if you plan your semester well, you will have time to do "more productive things" and still have a 3.5
The point isn't to "have time" the point is to have the most time possible. If you shot for a 4.0 that's going to take more time than shooting for a 2.0. In my mind it was always better to take the time saved by shooting for merely passing my classes and invest it into side projects than it was to invest that time to get a 4.0.
That didn't stop me from taking over the average course load and piling on difficult CS classes concurrently after having professors sign me out of pre-reqs, but since I shot for a 2.5 I didn't just "have time" for other things. I had lots of time for other things.
You keep asserting that it's important to invest time in high grades and you can do that while still having time for other things. I agree that one could do that, but I don't agree that investing time in a high GPA is really necessary or desirable in most circumstances.
Yes, but why not spend that time they're investing in classes on more productive things?