Of course other schools (especially secondary like mine) will make other choices about social media. There are a few of our teachers who have 'professional' twitter accounts (separate from their private accounts) that are designed for pupils to follow. Equally some departments have Facebook Pages where pupils will ask questions during key revision periods and other pupils or teachers can answer them. Obviously these things need to be transparent, but a 'no contact' policy can be a bad thing sometimes.
No contact through personal social media is the norm to protect the staff from allegations. Through school accounts that are managed and monitored, there can be a case. Using a member of staff's personal social networking or gaming account that is not easily managed or tracked leaves that member of staff very vulnerable and should be discounted for the sake of the career of the staff member if nothing else.
You asked when would a no contact policy be a bad idea. I gave two specific examples in my post. These would be prevented by a no contact policy, but I think they are useful and can be low risk if properly thought about. Where exactly do you disagree?