If this were the only reason, the invisible hand of the market would address this problem most of the time. Add too many administrators that add no value and you end up with a higher cost structure than your competitors and are not able to provide the same value.
Most of the time people demand more headcount because (1) they actually need more headcount to get the work done or (2) regulatory burdens force you to hire more headcount to deal with the regulations.
We're increasingly moving to a world where (2) happens more and more.
A good example on college campuses are things like campus police and kangaroo courts that deal with issues that should have been referred directly to city/state/federal law enforcement and the justice system.