Is that an example of the sunk cost fallacy, or corruption/lobbying?
The technical problem is wanting one end-all goto system instead of like 20 different utilities I guess.
In my experience it only takes one or two levels to get to that point.
Regarding the insane requirements, it's also my experience that a lot of companies think they're snowflakes, thinking they do something really special, when they're really just doing what everyone else is. For historical reasons they ended up doing it this way instead of that way and now they'd rather have the world change around them than change their ways.
At least with anything government, there is another problem: changing processes often requires a lot of work, which means explaining to (completely clueless) politicians why something is necessary, get cost approval for each change, convince majorities... it's easier to have an omnibus "migrate to newest version of XYZ" package and to spend the money on making the system operate according to your whims than to fix the underlying bullshit.
This is my experience working in government IT. The people whose job it is to go to meetings and talk end up being the ones representing the businesses interest and the vendor ends up running circles around them because they aren't in any way qualified to talk about something technical.
At some point these systems have to share info, dump info somewhere (data lake, backups, whatever), and output info.
Inevitably there will be one or two systems that connect them.
Plus the overhead of dealing with 20+ different vendors, systems, updates, vulnerabilities, interconnections, etc. is a nightmare. There is a point where a "single source of truth" is too much effort and too expensive, but a clusterufck of different systems is not a great solution.