Often fixing fucked up shit takes more time than doing it from scratch but because of the system has been built around the fucked up shit you can't just throw it away and then you end up having to deal with continuously paying the higher than should price.

In software the material cost is not the cost of a concrete material such as wood (like you mentioned) but developer time

Even using the carpentry analogy, I suspect the point is to avoid ruining something on which a lot of time was spent. The material cost of most raw materials isn't very high, but ruining something you've already spent hours crafting is extremely costly.

The other thing to bear in mind is that there is always more work to be done than time to do it. You have to factor in opportunity cost. As many other commenters have said, ultimately it's a balance which depends on your company's particular situation.