I worked for a telco years ago. We had separate development and operations teams. Operations worked on 3 turns of 8 hours, 7x24. They took care of every installation (pre-production and production) and they usually did them in the night shift. The staff was rotated over the months and there was no particular employer burn out.
By the way, one full time equivalent (that is, a hypothetical person working 24 hours a day all year long) equalled to five real people. That is, if they wanted ten people to be always available they had to hire fifty. You can easily understand why these arrangements are not common for Internet companies. Furthermore telcos have different requirements. Devops wasn't there yet and I wonder if it is accepted by management even now. My bets are against it.
I also wonder if companies like Google, Amazon and Facebook are organized in that way too.
Sounds like a sound way of managing it...as others have pointed out, occasional on-call duty or what have you is fine--it's the idea that staying at the office until 3 is "normal" and accepted as part of your equity payout is insane.
That sort of thing should be the extreme exception--anything else is just burning out employees.