[NOTE: We've moved this discussion from the thread at http://chowhound.chow.com/topics/968455 -- The Chowhound Team]
I side with restaurants on the "no seating incomplete parties" rule. I was surprised and amused when one of Devra's fill-ins dinged some restaurant hard for this longstanding (and in my mind perfectly justified) practice, like she hadn't even heard of it before.
It was like that time when the Andelmans, who allegedly work closely with the restaurant business, became indignant to the point of making a grotesque public scene when a hostess wouldn't seat them in the dining room before the start of service. Toads.
I don't think you have to think about it very hard to figure out why some places do either of these things.