The flip side of this is that when stakeholders/customers don't know what they really want or need, you can labor in the "requirements phase" for months. My team spent 900 hours last year just getting a functional spec and high level SRS together for a project that hasn't happened yet. Why hasn't it happened? Because at the end of the 900 hours, we presented our estimate (about 1100hrs) to the customer and he balked at the cost & time. Then my boss bitched at us for spending so much time on requirements in the first place.

<8 months pass>

Now we're looking at commercial solutions in an attempt to not have to build this thing and deal with this department anymore.

I agree with you 100%, but the number of people astute and experienced enough to quickly and deeply understand the problem to be solved (and the quirks of the customer) are few and far between. In my experience, perhaps 5-10% of any large IT organization fall into this category -- everyone knows who the superstars are and their time is always at a premium. Drives me bonkers.