I think it happens because the target dummy doesn't fight back and people put way too much faith in numbers. Most of bad players can't see anything but their logs.
Most of the bad players don't have a parser, much less know how to set one up, so it's not so much that they have too much faith in numbers or that they can only see their logs: most players are simply ignorant and have no idea how to do whatever it is they're trying to do effectively (and many are often willfully ignorant such that, even if they are told what to do, they refuse to do it anyways).
At the very least, a random person that is obsessed with their parsed DPS is at least going to put out decent numbers (or at least better than they would otherwise). A vast majority of players are just going to stand around with terrible numbers with the unconscious expectation that the rest of the group carry them (since most of them don't even realize that they suck so bad that they have to be carried). The log obsessed people can provide some reasonable quantification of their performance (even if, in doing so, they're missing every since interrupt that they should be getting and standing in bad all day long, which most bads are going to be doing too).
Most bad players aren't log watchers, mainly because the log parsers that have become so prevalent are only particularly prevalent amongst players on the forums; a vast majority of the people that play TOR either never spend any time on the forums or only come here on rare occasions (and many of them don't actually step foot in the class forums or have the wherewithal or interest to set up, learn, and consistently run a third party application while they're playing). The fact that many log watchers *are* bad players has nothing to do with the log itself and more to do with the player itself. There is a tiny minority of people that use logs that are actually distracted by it while in combat. A vast majority of people just use it as a post-combat analytical tool and method of accountability within the group (so that you can know, de facto, that one DPS isn't pulling their weight).
When someone does something stupid, even in an ops, my default reaction isn't "stop staring at the parser"; it's "stop being a bad". There are some amazing players that stare at their parsers all day and never stand in bad stuff or miss a piece of timing. Combat logs don't make a player bad or good; they simply provide a better view of the major dimensions of accountability within a group (the first, which most people pay attention to is the "damage dealt" axis which is only really viewable otherwise in the sense that the boss died before its enrage timer; the second is the "survivability" axis which the parsers are also good at breaking down since they show damage taken, healing done/received, and most break down sources as well so you can tell if the DPS is standing in bad or where they shouldn't be).