I can write a book about it, so I have to limit myself to some points here. Let me first say this, and I do not want to give the impression that I'm defending the practice, I solely want to point out that this exists not just with the railways and isn't limited to the public sector either. Every large scale enterprise, or even badly managed smaller ones, have this type of employee.
These people have work, and they'll do it. They'll even tell you that they have too much of it. But most of this work is meaningless or at the very least inefficient. It's not only their fault, the system permits them to exist, because of lack of skilled management (they also fear HR and the unions too much, even to fire people that have a contract and no statute).
I have learned in the years that I have worked so far, that there is a fairly large group of lowly skilled or educated people that have mostly become obsolete and work in jobs that could fairly simply be automatized. Only this year, a large part of employee time management (keeping track of working hours, asking vacation days, getting lunch cheques) went electronic, and this immediately identified tens if not hundreds of people who are no longer needed. But they won't be fired. In some cases I agree that would be harsh. If you're working for a company until a couple of years from retirement, to sack that person or expect he all of a sudden grows some higher competences that he never had all his life is not realistic. Yet at the same time, private companies have no problem making these decisions (although large companies are often falling back on the hated pre-pensions).
There are many other people that have meaningless jobs. To an outsider it may not be obvious yet that they are obsolete, but if you work close to them it becomes easy to identify. A lot of people become skilled at "appearing to be busy" doing nothing, or nothing that is productive anyway.
In our train workplaces, I know another kind of lazy exists. Those people have technical jobs with a purpose, but they're not exactly pro-active. They try to negotiate to do as little as possible in a given day, and once they have completed their schedule and there is time to spare, good luck if you're the guy that is supposed to motivate them to do something extra. It's impossible, and new young people with motivation coming in are soon turned by this system. This is where the unions are extremely strong. They don't realize they're killing their own employment not even in the long term, middle-long term at best.
Middle-management is definitely a problem in letting this problem continue. They don't use the tools they have to break this system. Only higher ranking or higher educated people are supposed to be evaluated at least once if not twice a year. Two time negative is out of the door, contract or statute doesn't matter.
The problem is, I say "are supposed to be evaluated". After my year of apprenticeship, I got my statute and have never been evaluated again. And this is rank 3 and up, maybe the top 2 or 3000 people in Infrabel, NMBS and HR Rail together. All the ones below that are pretty much never evaluated. It is planned to start with this at one point, but I don't see how middle management would even find the time to seriously do this for 20.000+ people. And as I said, they're really affraid to take action if someone doesn't live up to the job. Unions would fight it tooth and nail, so they'd have to invest a lot of time to document even just the most clear cases of abuse.
To answer some other questions: not everyone works on a computer, I'm talking about the central services in Brussels where I work. People also don't understand what a behemoth a railway system is, but that's another story. Those who work on a computer have internet access, but it's filtered (no social media although reddit works, but imgur for example not) and can be monitored. I know about a guy who almost got fired because he googled some strange stuff... (yet again notice: almost fired, not really).
Employee productivity: many higher level people (the rank 3 and up I mentioned) have KPI systems. All of the others.. productivity is how many hours you show up. And in some local district buildings even that is hardly measured.
tl/dr: you wouldn't believe how creative people can be to give the impression they're busy, and although this isn't a problem exclusive to the railways, fear of repercussions and limited objective tools to measure productivity of ordinary employees make that efficiency is rising way slower than it should