We don’t use technology to encourage appropriate conduct in other areas, for example, to keep people from taking two hour lunch breaks. We could attach sensors to their chairs and not pay them unless they were seated at their workstations. It sounds ludicrous, but blocking social networks is analogous. It treats people like machines.

Every company of size has an employee handbook and a set of rules about working in good faith in the company’s best interests. When employees fail to do this, we have procedures to correct the behavior and ultimately, we can dismiss those who don’t toe the line.

We are much better off evaluating employee performance on the basis of outcomes, productivity, contribution, and not whether they have Twitter or Facebook open on their desktop.

However as more and more people switch to smartphones, which work on their own networks and can’t be blocked (except maybe on company phones), employees will find it increasingly hard to control this, as most social networking sites don’t regular a computer anymore, simply a cell phone that is somewhat advanced.
So I agree with you, it would benefit companies more to develop policies that address ALL access of social media sites. Social media sites aren’t like online shopping sites; people don’t generally sit there for 20 minutes on a social networking site…it’s get on, get off, and be done with it.
I did a brief stint as HR assistant, and can’t imagine trying to write the policy though, allowing employees access to social networking sites without affecting their job performance.