It is a more regularized way of doing so than an ad hoc judgment on a bank-by-bank basis. The argument that bank boards should not be constrained in making capital distributions amounts to an argument that there should be no capital regulation, since even traditional capital regulations limited boards from, say, declaring a dividend that would take the bank below minimum capital levels.
And those who make this argument seem to have forgotten that some banks continued to pay dividends in 2007 and 2008 even as their situations became increasingly precarious. Another unwise idea would be to give the supervisory model to the banks. Some have argued that it is only fair to do so, because otherwise banks cannot know exactly what their capital requirements will be.