We've had the opportunity to develop several social media policies for organizations - some short, some long, some strict, some not so much. The open nature of social media makes companies nervous, and when companies get nervous they create policies. Those policies are often aimed at telling people no you can't, don't do this, always check with that department, never disclose this, etc.
Social media policies in the workplace are needed. In fact, I think every business needs to have one in place, no matter their size. They help to establish some ground rules and document some basic guidelines for employees as they interact in the social space. But if we've learned anything from prohibition or Spud Webb, it's that telling people no only makes them want to do it more.
So go ahead and develop a social media policy and roll it out to your staff. But keep it realistic and understand that social media, when used correctly, can actually bring a new level of efficiency to your staff.