Almost every large company does this. It protects them against litigation. Traffic is logged and YIM just sends traffic in open packets. That being said, it's not IM conversations that are being logged, but just traffic. At least that's the whole idea I perceived.

Granted filtering through a couple thousand employees ethernet traffic sounds daunting, but, modern packet sniffing software will let one capture/monitor down to the port level on any MAC address on the network.. effectively letting a network admin recreate entire IM session and browsing sessions after the fact.

As for using the network at work, I treat everything that goes over the wire (either email, instant message, web browsing, etc) as if it had to pass through the CEO's office, simply because once a packet leaves my NIC, who knows how many sniffers, admins, etc, it passes through before getting to its endpoint.