Seems like their would be a conflict of interest when making decisions about search, web-based mail, self-driving cars, mobile phones,... (Google stuff). But I agree a techie is better than anything else.
Personally, I'm far less worried about this revolving door than others.
If you know of anyone qualified for the position but yet doesn't work for a company then I guess I am wrong but having work experience is kind of a requirement.
What's the fear, that their appointment will lead to a broken IT procurement system rife with conflicts of interest, perverted incentives, and no accountability? That's what we already have now.
I can't imagine a CTO not having worked at any of the big tech companies.