Is one incentive their ability to communicate their perceptiveness to people in their general community?
Are there other incentives?
In addition to the other reasons that have been discussed by other answers, many of which are true, there is one more fairly distinct reason: They may some day need a letter in return.
For example, there are often nomination letters for awards, or promotions from students. I've been in the position to write at least three letters for someone who wrote me a letter of recommendation in the past, and while I'd like to think it didn't bias my letter, it certainly made it easier to justify the time and effort that went into crafting it.