First—the doctrine comes from 1 Corinthians 15:29.

29 Else what shall they do which are baptized for the dead, if the dead rise not at all? why are they then baptized for the dead?

Secondly—as I have already explained, individuals in the LDS church are doing this, having already been told to stop. We have been told to work on on our ancestors, and not famous people we admire. The church is now looking at ways to shut this down—probably taking away the necessary computer access to those people or even sterner measures.

There is no central department that decides on names; there are just too many people doing their genealogy for Salt Lake to clear every name.