For a research position in industry, your job is to create new knowledge, and that's really hard to do. It's partly a matter of knowing what's already known, partly a matter of understanding how to do research, and partly a natural skill of just being "a good scientist" -- i.e. someone who can pick the right hypotheses, make the right approximations, and turn experiments into understanding. These are all hard skills, and I wouldn't be especially confident in someone having developed 'em in only a Master's.

The incentives are in all the wrong places. Schools want funding. They get funding by writing grants, which requires research. They want to do the research as cheaply as possible so as to maximize how far each dollar goes. So, they have a very strong incentive to keep grad students in limbo as long as possible, delaying graduation.

This much is true, especially in the US. In Australia, where I did my PhD, the funding agencies solved this problem by declaring that all PhD students should finish within four years, and that every semester after that results in certain funding penalties for the hosting university and department. (In case you think that this provides an incentive to grant undeserved PhDs don't worry, theses are marked by three examiners of whom only one can be at the student's university, and one of whom has to be in a different country).

Some parts of Europe are even stricter -- finish your PhD in three years or you're out the door. In fact my last department (in the US) lost a promising prospective PhD student to France after she realised she'd probably have her PhD three or four years earlier if she did it in Paris instead of California.

So actually, to anyone considering doing a PhD in the US I do heartily recommend checking out your options in other countries. Nobody wants to be a 30-year-old grad student.