Overworked employees are unhappy, they make mistakes and they are not contributing at their optimal levels of performance. They are constantly under pressure which has negative impact on their health and lives outside work as well (you do remember that work is only a PART of people’s lives, right?).
While I understand that in certain professions and industries one can experience cyclically higher volume of requests (ex. tax accountants in March and April) and those exceptions can be dealt with, but if your employees are constantly overworked, no matter how much you pay them, they will eventually leave.