Because when the employee was asked what they wanted to be doing in their career, their answer amounted to "be working somewhere else".
> Doesn't this just create a crummy atmosphere where promotions only go to people unwilling or unable to leave the organization?
There's a difference between "people who are willing to leave the company if it cannot provide them what they want" and "people whose desires appear to center around leaving the company".
It does not amount to that. In many, many, cases people start looking for jobs wishing they could stay at their current job.
Assuming no relevant facts were omitted from the description of events, it does, in the context of the question it was offered in response to.
> In many, many, cases people start looking for jobs wishing they could stay at their current job.
Sure, they do. But the answer to the question "Where do you want to be in your career?" in those cases would focus on the things that they wanted to enable themselves to stay in and love the job with their current employer, not the fact that they are looking for outside opportunities (the latter might be mentioned in the context of specific desires and the fact that certain outside opportunities seemed to be the only way to realize them, but even then the looking for outside opportunities would be secondary to the main answer about desired job features, not the main answer to the question.)