Errors do increase with length of shift but they also increase when continuity of care is disrupted by shift change. When you look at patient outcomes it's a wash. This probably speaks more to awful shift change procedures than anything else but reducing the hours junior doctors are fostered for has not lead to any improvement for patients.
Perhaps this is just convenient for employers. The real problem could be in shift change procedures but they aren't incentivised to fix this and lower shift times.
http://healthland.time.com/2013/03/26/fewer-hours-for-doctor...
I seem to recall surgery being an exception in that shorter shifts lead to more patients dying but I can't find anything quickly.