So. The first analyst at Goldman Sachs who takes time off is also going to be the first person to get let go. And there will be 50 freshly minted Ivy-league graduates waiting to take that spot who are willing to work longer hours probably for lower pay.
People at investment banks generate their edge by working hard and being the best, and as such, they'll get compensated accordingly. Having worked for one of GS's main competitors on Wall St., all I can say is that their traders work their asses off (based on personal observation as well as by reputation). Hence, I don't think it's particularly shocking that they're generally considered to be the best across many asset classes. So as long as they are incentivized to work hard, they will.
The incentive is the money. Once the money dries up, then there will no longer be 50 people waiting in line for that job. Maybe they'll go chase after the next hot thing (Facebook, Twitter, etc.) And that's when the hours are going to come down and maybe the culture will change. So when is the money going to dry up?
A 2019 Update:
You know, what’s funny is that in the last few years since this answer was written (back in 2016), it’s obvious that work life balance has markedly improved on Wall Street almost at every firm and at every level. There’s probably some cyclical reasons for that (fewer investment opportunities, few IPOs, etc), but there are major structural reasons as well.
Specifically, it turns out that Silicon Valley tech companies like Facebook, Google, and a plethora of start-ups are actually offering young and eager Ivy League graduates a better value prop: Higher compensation, equity ownership, better work life balance, and higher impact, more meaningful jobs. In the face of that, Wall Street firms are forced to largely follow suit, either by increasing compensation or improving work life balance (the equity ownership aspect and impactfulness issues are not solvable), otherwise they can no longer compete for the same human capital.
Why slave away at Goldman Sachs for $400k and a $15 Seamless budget when you can turn around and be a PM at Google, work half as many hours, make 50% more, get free meals, and get your eggs frozen for free? Plus the optics are much better at Google and people won’t shit on you and your work.