For one, you can use directed evolution to optimize a biological system without relying on rational design.
For another, biological development is massively flexible. Consider that when you evolve a longer arm, you don't need to mutate genes to ensure you have longer muscles, tendons, nerves, etc. In fact, you can grow an entirely new arm by just initiating a limb bud at the correct time in development. By contrast, in electrical engineering all design aspects are "rational" - when you change one part, you must change the other parts to compensate.
Modularity and reductionism are "problems" only in the sense that they reflect differences between our engineering strategy and the substrate we are trying to engineer. We must discover the engineering principles that match the substrate.