"Up or out" or high year of tenure as we called it, is designed to prevent stagnation in the lower ranks, ie, not being promoted. In the E-4 to E-6 range, it gets those who can't test well instead of being able to perform. In the E-7 to E-8 range, it gets those who aren't viewed favorably in the promotion boards as "the top 1%".
The promotion system in the AF is "weighted" with numerous factors brought to bear; performance reports, medals, written tests on your skill set and general AF knowledge.
Up or out has its place, but I think we lose a lot more the of high caliber performers, not chaff (E-7 to E-9 or O-7 to O-10) as a result of it.
I think they'll protect the upper ranks and leave things in place for those who actually perform the mission. JMO