A couple of places where I live do that if it's the venue putting the gig on - it's normally a case of "get in X people and you won't have to pay for the sound guy", and it's normally a pretty reasonable amount. However annoying it is, I can understand it; if no one turns up, the venue doesn't make any money, so they're just trying to make sure they get a crowd. It also means bands won't bother trying to play there unless they're prepared to put in the effort of advertising it. The promoters never do it - if they tried they'd never be able to book any bands - so now my band always try to book through someone else and not directly with the venues. Round here at least, the promoters are given pretty much the same deal though.
The second biggest venue here (800-ish capacity) puts on gigs for local bands where they essentially force the band to buy tickets to play. They give the band a book of tickets with a face value of (for example) £5, and the band has to sell them all. If they don't, they have to pay for the leftover tickets themselves. This isn't properly explained until after the band have the tickets, and the tickets themselves have the venues price printed on them - so for the band to make any money, they have to A) charge more than it actually says on the ticket and normally B) sell all the tickets. One of my old bands was made up of 16-17 year-olds when they played there, and they were given 40 tickets to sell - that's £200s worth of tickets for a lineup that only has unsigned local bands on it. Fortunately they all went to different schools so they got a huge crowd in.
It's a fucking disgusting set up, and basically stops most of the locals bands from playing at one of only two decent-sized venues here (which are both owned by the local University) unless they get a support slot on a tour. The metal bands seem to have almost universally stuck two fingers up at them, but there are still rock/indie/punk bands getting shafted there twice a month.
Steve