It closes future doors for you. Who gets assigned to the interesting new project? Not the guy who's phoning it in. Who gets first crack at the limited pool of raises? Not the guy who's phoning it in. So, even if all you want out of work is money, phoning it in is bad for you. If you want more, if you want interesting, fulfilling work, it's bad for you there, too.

More than that, phoning it in is bad for your character. That assumes you share a certain moral framework or outlook, though. If you're a moral nihilist, then it's really hard to make such an argument make sense to you. But let me at least try to make it make sense.

I want to be part of something, part of a team, not just a cog in a machine. I want relationships, not just for all of life to be transactional. But, see, wherever I go, I take me. The "me" that I take to my marriage or to hanging out with my buddies is the same "me" that goes to work. When I make one part of my life purely transactional, it's hard to keep that from leaking out into other areas that definitely should not be transactional.

Now, you're going to say that companies take advantage of that, and you'll be right. They do. They try to sell you on "we're all a big team!" and such. But the fact is that some places do actually try to live that out, and some places purely use it to try to extract the maximum effort from suckers. And the second group tends to be corrosive to your character, too, even if you don't phone it in, partly because such places tend to have lots of people who are phoning it in, but more because the company is phoning it in in how they relate to you. But the answer is not to phone it in in return. The answer is to start looking for somewhere better.