All traffic must stop at a stop sign, even if it is just 2 seconds, (except for the purpose of avoiding conflict with other traffic or of complying with the provisions of any law;) then proceed only if it safe to enter the intersection.
There have been occasions where drivers on the road that has right of way have stopped, held up traffic behind them to allow a vehicle at a stop sign to enter. Or have stopped with no one behind them to let the vehicle at the stop sign enter. This is very bad practice as it blurs the intent of the stop sign. Which is to stop traffic entering an intersection until traffic has past and it is safe to proceed.
The only time is is safe to allow a vehicle waiting at a stop sign to enter in front of you is if the traffic is already stopped due to congestion and you have correctly left a gap so as not to block the intersection and the vehicle at the stop sign is turning left.
Choosing to stop traffic behind you to allow a vehicle at a stop sign to enter in front of you is just plain stupid!
Choosing to stop when there is more than enough room for you to pass the intersection to allow a vehicle at a stop sign to enter in front of you is just plain stupid!
I can hear all the arguments about it being courteous to allow the other vehicle to go in front of you but they are at a STOP sign and you should just drive past them and allow them to come in behind you. In the end it is much quicker for them anyway.
Drivers at stop signs that experience this should really wave the other vehicle through and not encourage this behavior.