It's possible that you'd miss a theoretically possible "good company with a bad HR department" although one can argue that they wouldn't remain a good company for very long...
Which, of course, never goes wrong ;-)
(I shudder to think of some of the early hiring decisions I made as a techie... I sucked. Hiring is darn hard. Being technical doesn't magically make you good at it.)
It's company growth that causes it.
Once the overhead of managing the admin side of employees becomes sufficiently large centralisation is a common result.
Getting that up and running right is hard - especially since the hard bits are often outside of the skill set of the folk hiring the people to run that new department. Take too long to do get it right and a good company can go bad quite quickly.