If you need four hours of downtime, either the three 8 hour shifts would have to overlap (meaning for the overlap periods you'd need twice as many workstations, i.e. a warehouse twice as big) or the third shift would have employees standing idle for 4 hours.
Downtime is useful because you can get in and perform preventative maintenance and software deployments, and if there's a problem (like a machine breakdown) that delays picking by an hour or two, you can complete the day's work instead of having the problems spill over into the next day.
Why they don't offer an option to do three 7-hour shifts I don't know.
Simple really - productivity. On every shift you lose time starting up and getting everyone to work. This happens twice a shift (start of shift, coming back after lunch). There is a gap in time from when everyone clocks in to when they actually start producing. This time is referred to as "stand-up" and is when the manager covers safety, quality, admin messages, announcements, etc and also performs stretches. Multiply the time spent doing this by the number of minutes your shift is producing absolutely zero and you start each shift in the hole. You also lose some towards the end of a shift (everyone stops just a bit early until you start dropping the hammer). Knowing this, the fewer the shifts, the less "lost" productivity.
Downtime is useful because you can get in and perform preventative maintenance and software deployments, and if there's a problem (like a machine breakdown) that delays picking by an hour or two, you can complete the day's work instead of having the problems spill over into the next day.
Why they don't offer an option to do three 7-hour shifts I don't know.