If you've worked in a huge org like Apple or the government, you've seen incredible inefficiencies. How can all these smart and often well-paid people be doing something so wrong (i.e. wasting time with political battles, etc.)?
But that's only true if you look at the "medium view" of the organization. If you look at the large view, how the money actually flows, then it might be beneficial for one part like IS&T to be kind of broken, as long as the rest of the company works.
I have seen this dynamic at other companies. Internal tools can sometimes hold too much leverage over the organization. They can almost "blackmail" people into getting their way because they have a literal monopoly over what they do. It might be better to let multiple teams fight battles amongst themselves, which seems inefficient if you're working as a regular joe, but could be efficient from the CEO's perspective.
Edit: A related idea is the principal-agent problem:
e.g. if you've worked at any large org, you know that not everyone acts in the company's interest (nor should they strictly speaking). A trivial example of this is putting extravagant meals and vacations on the company's card. (Although the nontrivial instances of this go all the way up to fraud/embezzlement.)
A less trivial example is making up fake engineering work that sounds good when review time comes, but doesn't actually advance the company's business.
So some things that seems mystifying on the ground level are pretty much a defense against this inherent conflict of interest.
In an adjacent domain, a lot of HR is a defense against employees acting in their own interest. (I see a lot of veterans on here saying: "remember HR doesn't exist for you", which is presumably a hard won experience.)
To a degree that's true. However I'm reminded of the CEO of Sears, who embraced that concept entirely. He expected each team essentially to battle for funding -- with (unsurprising) result that it was a free-for-all and teams spent more time wrangling and fighting than actually getting stuff done.
A little competition motives; bellum omnium contra omnes is just a waste of resources.