It broadens and complicates the claim, and leads to greater expense. It's unfortunate when claims administrators feel they can't refer for psychological help without hurting their case. It can save money in the long run. This is exactly the point at which an employee assistance program can save lives. But that's another chapter.
Disability can seem an acceptable alternative lifestyle for some.
Workers' compensation is one way of pushing back. Perhaps the employee is too young or doesn't have savings to retire early. Perhaps their educational level and employment skills aren't sufficiently marketable to assure finding a better job. Or perhaps the personal values with which they were raised don't allow them to consider other alternatives. Workers' compensation is one way of temporarily relieving a painful situation.