1) Not work related typically really means “not whitelisted” so often sites that would be beneficial to the employee completing their jobs will also be inaccessible.

2) Since everyone has smartphones they will just access the same sites with their personal device which is more time-consuming.

Because, the ones who block stuff often don't keep up with what is work related. So in the end you have to write lots of e-mails until they notice that you are one of the few users that should be allowed to use the whole internet.

Eventually, one day they will find out that their blocking is too strict and that they should restrict the blocking to sites which actively try to attack the users computer...

So it is more of an execution problem, but as it fails quite often you could call it stupid to invest into such a feature.

I once had to fight with IT to unblock MSDN, and we were a Microsoft dev shop. Glad I do not work their anymore.

Because trying to enumerate everything that could possibly be relevant to your work probably misses some valuable and relevant things.