From the manager's side, you're absolutely correct. The SEV looks bad on you, and is a headache to document.
From the perspective of people you manage, it's a very different picture.
We (I say "we", because I was an IC) sit under you, and every year at performance review time you're effectively required to put some percentage of us in the "LE" bucket. Never mind that we could theoretically all HV3+ if you measure by "normal" peoples' standards, your manager isn't going to let you mark all of us as HV3 at the performance meetings. I know this, because I've been there as well at those meetings where truly high performing people were downrated to fit a distribution.
So what happens? When I see a peer's critical lurking bug, I have no incentive to fix it for the sake of prevention. If I fix it quietly so that it never surfaces, it looks like I haven't done any work for the week, or have done un-impactful work, and I get the stick from you. Preventing fires doesn't look like work, to non-technical eyes.
The only "safe" way to play this game of "survivor" is to let that bug surface eventually, then when the SEV comes up, I jump in and fix it, earning your approval, skip approval, VP approval, as well as potentially the other person gets the stick from you, because you have to give the stick to someone anyway, you get a reason to stick it on them. At least it's not getting stuck on me.
I'm sorry if this comes off as shocking to you, but it really shouldn't; the incentive structure is NOT set up for teamwork, plain and simple. If "putting customers first" is a value, then it absolutely needs to start from systematic changes of how people are managed.