Well as usual the truth lies somewhere between the two.
For many years Labour actively encouraged people to go on the incapacity register. It gets them off the unemployment register you see, and they need to be able to boast that unemployment came down under New Labour (sic).
The French had a similare trick to keep unemployment figures down, they called it National Service!
Anyway, as a result if this policy, we now have many people registered as unfit for work, who are no such thing.
What needs to evolve is a triage system which is more friendly, and less in the mould of the Waffen SS. I too have heard stories of unsympathetic interviewers, reducing people to tears, and telling those, obviously unfit for work, that they will be removed from the register.
It would help if the interviewing wasn't done by private contractors, on a 'payment by results' basis. In other words they are only paid if they get the numbers down.
The same thing is happening to the long term unemployed, who are made to jump through hoops, by these same contractors.