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Anyone who has actually had the responsibility of purchasing and maintaining a complex network infrastructure for any reasonably sized organization wouldn't think twice about a decision like this. It's easy for the users to say "Throw us a little bone, it isn't hurting anything." All the while, they're sitting in front of a company computer loaded with company software using company bandwidth for doing something that is not work related and can be distracting from doing actual work.
Maintaining balance and a happy work environment is certainly important. But there are countless ways to do that which would conform to company policy and not set a precedent that could be abused later. Because I know from experience that if you give the users an inch, they'll expect to take a mile next time. If you say "Ahh it's OK, go ahead and watch the game this once.", then Judy McLazyass down the hall hears about it and justifies watching Judge Joe Brown, because Bob gets to watch basketball. Then it snowballs to the point of slowing the network down. And at that point, people begin bitching at IT because they don't have enough bandwidth. Which of course is also IT's fault.
This may seem to the common user to be something minor and would never actually cause any harm. But I can tell you from experience that it adds up very quickly.
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