Firstly, that's just not true. That is a thing that happens, but it is not the only thing that happens. Bureaucracies come about for all sorts of reasons, and in all sorts of ways. The one you describe is only one among many of those mechanisms.
And secondly, what's your point? The problem is still what it is. The regulations are the location in the stack that need to be corrected.
And secondly, what's your point? The problem is still what it is. The regulations are the location in the stack that need to be corrected.