I understand your point of view, but the BigOrgs are strange. They say they want to move fast and succeed, but they are also magnets for people who would much rather accumulate money/power through politics than work. This often sets up perverse incentives to do the opposite of what would make sense.

For instance, the IT department manager claims to need more headcount and money to fund it, because they believe that having more budget and employees shows how important their function is. Engineering requests a new VM, and the request sits and sits and sits, so long that you start believing that they are overloaded. Engineering complains that it is taking too long to provision machines, and IT (for the 100th time) says they need more headcount to keep up with internal demand. To fix the problem, management grants one or two hires, things get marginally better for a while, until the cycle repeats.

In this scenario, Engineering is trying to get their product completed, and looks bad because the schedule is slipping. If you are the Engineering manager, do you care more about fixing the organization, or sidestepping the issue by swiping a credit card?

Fixing things gets political fast, spending money less so.

Rightly so. Unless you're the CEO/CTO you're not going to be able to fix something like this.

They are, and it is by far the most effective approach for most organizations.

Not managing your own physical infrastructure is not a dysfunction; unless you have a very specific hardware requirement, or are very large, on-prem is just never going to be cost effective.

Where it is cost-effective, it can still be incredibly strategically limiting.

Yes.