I can definitely understand the angst and frustration from program directors, but the system has created an indelible impression on the applicant. I think that most people who choose psychiatry do so because of their experience in medical school (in addition to those who wanted to do it from the beginning and the MDPhDs who are interested in neuroscience research), but for the average average applicant (middle of class, ~225 step 1 score), an added perk is being able to train at an institution that might be otherwise a reach in even a slightly more competitive specialty like internal medicine.
Thus, the applicant wants to ensure that he or she gets into the best place possible, and despite what the numbers say, the Match is a computer system and thus is imperfect (though I still think it is a great system for the purpose it serves), and the applicant feels compelled, to over-apply, NOT SIMPLY TO MATCH but to match at the BEST PLACE POSSIBLE.
For example, the afore mentioned applicant realizes that he/she is a competitive candidate for psychiatry, and based on past numbers, the Dean of Students at his/her medical school suggests that he/she might be able to obtain an elite residency. The applicant wants to go to the best place possible. Not wanting to miss out, the applicant can easily apply to 30 programs
1. Tier 1 (Unlikely but still possible): MGH, Columbia, UCSF, UCLA NPI
2. Tier 2 (Definitely within the realm of possibility): Cornell, NYU, Sinai, Pitt, Penn, Yale, Longwood, CHA, Hopkins, Emory, UTSW, Duke, UNC, MUSC, Wash U, Michigan, Northwestern, Stanford, UCSD, UCLA Harbor, Univ Washington
3. Others that are on the rise and probably as good as or better than some of the tier 2 programs: Vanderbilt, UChicago, UIC
4. Handful of others for geographic/family reasons