Why is fighting allowed in hockey?

There are a few different reasons often cited for fighting:

1) Built in competitive pressure valve: Playmaking -> Hitting -> Fighting

Hockey without contact checking (basically "shinny") is not the same game. As a result, body checking is integral for separating a player from the puck. A hard hit is a rather extreme example, but it serves both the purpose of disrupting the play and also intimidating the opposition's playmakers. This is where fighting comes in: it is considered a way to keep hitting and cheap shots in check in the same way that those acts reduce playmaking chances.

Basically, there's a relationship between playmaking, hitting and fighting and extreme cases of any one of these aspects of the game represent players trying to create competitive equilibrium on the ice (i.e. can't score? Then hit and fight. If you can't fight, hit and score, etc.)

2) The Code

In the NHL, we're told players and coaches all share a tacit understanding that the protection of skilled players (i.e. the Gretzky-type scorers) is established via the concept of mutually-ensured destruction (i.e. the Matt Cooke-type agititators) and protetction (i.e. the Marty McSorely-type enforcer). 

Basically, any agititator can slash and cheap shot a skilled player to the infirmary in a game played with sticks. The only thing keeping the agititators from completely running amok is the threat of either the other team's "rat" taking out your star or their enforcer fighting your rat or important players.

In other words, it's understood that any physical license one team exerts on the game is open to retribution in kind from the other. Fighting is the extreme expression of this cycle of recidivism

3) Entertainment via marginal talent

No one in pro-hockey likes to admit it, but most outright fights in the regular season are not in fact due to "the code" but rather mostly due to a desire for marginal players to create a spectacle to "fire up" fans and kindle the intensity of a slow or flagging match.

Players who regularly fill this role of token fighting sacrifice are generally not important to the final result, but do carve out a niche career by entertaining everyone with their predictable bouts. These fights though generally have absolutely no purpose as most are staged farces of animosity--both participants agree to "go" before the gloves are dropped".  The violence is real but the meaning behind it is as relevant to the game as "pro" wrestling.

4) Tribalism

The origin of hockey is not akin to football (soccer) or rugby. It is generally considered to have been a game played between distinct cultural divides in melting pots like Quebec (First Nations, French Canadian, Irish). Fighting became enshrined in this context because of the tacit understanding that the violence on is a cultural pressure valve and as such relieves the animosity for escalating on the street.

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Those are the most common rationales that comes to my mind. Of them, only the first makes any sense to me in this day and age. Even then, it's a tenuous one at best as the IIHF has shown we can have NHL-style hockey (Canada vs USA in the Olympics) with a rule-set that does not condone fighting.

The days of "The Code" are especially numbered as our growing concern over catastrophic brian injury is leading to hockey conduct being evaluated in fields where it just doesn't pass the smell test: the courts and insurance assessments. For example, "The Code" sounds really gallant until it lands a violent player in legal trouble where any defence on the basis of such a tacit understanding of brutality does not stand up to civil litigation (i.e. the pending endgame of Moore vs Bertuzzi).

Also, as player rights and contracts have matured so has the underlying worry about the long-term legal responsiblity of the NHL in terms of its employee safety and compensation. Fighting isn't likely to die off because people within the game choose to get rid of it. Rather, it will be reduced to a vestigal quirk because insurers and litigators will elminate the financial risks associated with random violence. After all, what underwriter would insure the contract of a player who is vulnerable to concussion once the medical evidence about head injury from condoned fighting is more robust?