They do however have an excellent grasp on ML. Let's say you have billions of images,document images and documents (of any kind) they will search it better than google can. They obviously do a lot more but the thing that makes them shine is the UX. If you're a cop for example you put in a license plate and it shows you all you need about the car,driver,history,correlations and analysis of all entities and much more without the user being expected to know anything technical at all(you can imagine what can be seen when someone puts in your IP or phone#). They do a good job at linking documents and data points. I'm afraid I don't know enough about off the shelf ML to make a good comparison.
I don't agree with Mr.Thiel but his logic is "if we don't do it,someone will". And that's the idea behind in-q-tel (I'm sure HNers and the VC scene know that name well). Thiel was also wrong about Trump, things are now worse off foe everyone. America has just about lost her grasp on keeping the world order,many trust relationships that kept peace and order since ww2 have been ruined.
As far as their work, I don't think "someone else" would have done it,because even if they did the quality may have been poorer. But I do agree the problem is far more deep-rooted and sinister than it appears.
For a long time you could safely trust the IC to know and respect democracy and the rule of law. But in recent times, they have violated every core tenants of a legitimate rule of law and civil liberty. Keeping the nation secure is not an excuse, if it is then any coup or subversion of elections can be justified this way. Are they helping their country or hurting it?
The existence of palantir and in-q-tel is very natural. The problem is how the IC and LEO communities as a whole have collectively lost sense of how everything they do is by consent of the people. But moreover, they should be on the people's side protecting rights and liberties. They stand as enemies of our liberties, sophisticated stalkers that will break any law to stalk you and control you all for your own good.
I think Mr. Thiel will regret his place in history. But it's very hard to blame him or pala tir. It's like blaming the sharpness of a knife when someone stabs you.