People tend to have a strong urge to avoid responsibility (and therefore making decisions), that's the whole point of having superiors. If everyone's fully responsible for what they do, they don't do their work.

Even an incompetent superior helps here, because at least in theory you can divert responsibility to them. It allows people do their work for the majority of the time when things don't go wrong. If they do go wrong, everyone gets to blame everyone else somehow, maybe the company tanks, but really life goes on.

You may point out problems here and there, but no other obvious alternative (like flat structures) are devoid of problems.

I'd be wary of solutions that take human responsibility completely out of the equation (such as AI). Sometimes a decision not made is actually for the best.