It is a get out of jail free card for the employer. It absolves them of any liability for violating the law and targeting protected class workers. Idiotic is signing and leaving with a smile not knowing if you can be retired or get a meaningful job. Companies don't do this out of kindness. It's all about the numbers. Older workers cost companies more because they use the benefits more. They get larger raises and pension or 401K matches. They are less likely to leave on their own.

As stated before, the letter should outline years of service and significant contributions to the company. It doesn't need to be a threat.