From an accounting standpoint it's funding-neutral: you assume a debt liability with offsetting reduction of the equity liability. This makes the return on invested capital larger, since the same profits get divided over less shares. The investors to whom the capital was returned can then invest that capital somewhere else.

It does make the company more vulnerable to economic downturns of course, since debt comes with mandatory payments that equity doesn't have. But making the tradeoff between larger profits and larger stability is what the investors hired managers for. If they don't like the tradeoffs being made, they should get different management or sell their stake in the poorly run business.