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The SocialCast argument seems logical and intuitive, though almost certainly not the final word on the topic.

The crux of their point (available here) is that access to personal social networking as a bit of downtime to clear the head, can actually improve employee productivity. And it's a valid point but the concerns about such a move are very real, from productivity losses to compromised corporate security. I'd like to add a couple more ideas to the mix.

I'd argue that social media is, especially with Gen Y'ers and younger, becoming more than just a tool. It's an essential part of everyday life.  And as that evolution continues, employee pressure (from current employees and potential recruits) on companies to open up the proverbial social networking doors will likely increase.  The companies that do it before feeling the pressure are likely to be called "cutting edge, innovative leaders." Those that do it after run the risk of seeming "behind the times."

Further, almost every social media team I've come across feels under-resourced for the sheer volume they need to monitor.  So why not give employees access and ask them to watch out for the company that helps them put food on the table?  If your company has 10k employees and 10% actually keep an eye out, you've just built a network of 1k watchdogs capable of monitoring far more than even the largest, most well-resourced internal social media team can likely hope to.