There is not a slew of fees attached to a paycheck.
Employees are clearly getting charged a bunch of fees for using their card. Do you think there might be a disclosure problem? Maybe they can't access a bank. ATMs only deal in $20s for the most part. I guess the employees could carry around a check register with them to keep track of things...
How does the inactivity fee work? They might be charging these people for not using the debit function. You seem to like hypothetical situations so there you go.
Once again I am fine with this being an option. It should not be allowed as the default option. Employers should not be able to forget to mention conventional checks or direct deposit if those are available.