I agree with you in that there are much better ways to achieve this, and they are asking for Incident to be used in a manner which it's not intended for. Also someone will have to look at that Incident sitting in their lists for a few years? No thanks.
Can't really help you argue with the business, but I will wish you good luck!
are you sure, you are in the right process? Incident Management is used to get a disturbed service back to working mode, so made for quick restauration. The time aqquired for active and so on is categorized by priorities. If you want to add a priority witha long SLA - as mentioned years - what does the service look like? Logically speaking, there we find an SLA for a service, which - once there is an incident a service interruption as to speak - can be repaired within years. So why do you maintaion a service, no one cares if irt is working or not?
Is that known to the business?