The enemy's gate is down. If a CTO brings the surface area of "built in-house" down to zero while accomplishing all of their objectives, ad infinitum, they win the game.

Obviously, it would be impossible to maintain such an advantage in real life for any extended period of time. However, orienting your team towards that goal gives the CTO a way to quantify risks and costs associated with accomplishing their objectives. Health checks and SDKs are standardized commodities that can be implemented and maintained at a predefined market rate that's always approaching zero. Finding and fixing a bug in your proprietary code has a potentially infinite cost.