If you have no control over the hours you have to work, could be called in at any time, or are not allowed to work for others at your discretion, a paid a base rate for being retained makes sense.
Not to mention, for many jobs, time at work is not a measure of ‘how much work’ you’ve done and such a measure creates an incentive to be inefficient.
It is a stupid idea in the sense that you can see everyone at the top of society financially, socially, influentially, does not have that apply to them or want it to apply to them. From landlords and business owners wanting to be paid for what other people have actually done, to singers and movie makers and authors wanting to be paid for every copy long after what they did, to personal branding wanting to be paid for putting "Michael Jordan" on clothing, to patent holders wanting to be paid for what they thought of, to license holders wanting to be paid for what they permit others to do, to conduits wanting to be paid for what travels through them, to governments wanting to tax what others do, to lobbied politicians wanting to be paid for not getting in someone's way. If the people 'above' you definitely don't want it for themselves, it's quite likely a stupid idea for you to accept them doing it to you.
On the other side, business owners want to pay employees for "what they have actually done" miss the forest for the trees; leading to stories like the developers committing unfinished code, QA finding lots of bugs (for all the basic functionality that was never written), developers fixing those bugs, and hooray the metrics look great for activity but meaningful progress is through the floor and quality is nowhere to be seen. And keys pressed, minutes spent in meetings, reports written, are on the up - easily padded filler and busywork - and difficult to measure things like customer satisfaction, employee morale, creativity, design, planning, are on the down.
Not to mention, for many jobs, time at work is not a measure of ‘how much work’ you’ve done and such a measure creates an incentive to be inefficient.