I've worked with people who would have produced more for the company collecting their paycheck and just not showing up to work. Don't let the freeloaders distract you, and maybe let the ball drop occasionally so they HAVE to catch it, or prove they can't anymore. Let them hang themselves, no need to punish!
Well, Pyrrhic implies that I think it's too great a cost because you'll take down the people with social issues (and more) along with the much fewer obvious freeloaders.