The system was already broken from the moment credentials were leaked (or if you're a purist, from the moment they were hard coded into a file). The impact just wasn't realized or felt yet.
I'm definitely not defending it, just saying the red tape in some orgs can be nearly impossible to defeat.
This problem should have escalated as high as needed though to bypass the red tape and fix the security issue immediately.
Probably a failure of weak middle management not having the guts to communicate the problem up.
2. In what hypothetical universe does a life support system connected to the internet contain a trove of customer PII? And where disconnecting this hypothetical system from the internet _cause the patient it's supporting to die_?
If you design a system that could cause significant personal harm or a meaningful degradation of quality of life for someone due to cloud provider downtime, you're just a bad engineer. There's no such thing as a data center that's failure-proof. If someone's well-being depends on a system, it's simply negligent to be intolerant of failure conditions.