There is nothing wrong with learning from other's experience - vicarious learning, as contrasted with direct experience, is an important way for both people and organizations to learn how to navigate a path through the world. After all, it is a lot cheaper and easier to learn from the mistakes, setbacks and success of others than to treat every management challenges as something no organization has ever faced before. So benchmarking using other companies' performance and experience to set standards for your own company - makes a lot of sense. In the end, good or bad performance is defined and measured largely in relation to what others are doing.
The problem lies with the way that benchmarking is usually practiced: it is far too "casual". The logic behind what works at top performers, why it works, and what will work elsewhere is barely unraveled, resulting in mindless limitation.