I've been told this and it makes sense when departing from Heathrow where the allocation of bags to containers is an automatic process and it's strictly done on the barcode...priority tags will make no difference in those circumstances.

That status passengers don't get priority encoded in the barcodes is a separate (and in my opinion valid) complaint.

As already mentioned, there are airports where I consider this a distinct advantage as priority tags might as well say 'please steal from this bag'...