Happens more than you would think... Key phrase is usually "on a need-to-know basis". It is difficult to argue with such phrase as it seems completely reasonable on the surface, but what happens is that someone has to decide which information someone needs to know. Such decisions are not without mistakes, and to top it off, there is even incentive to keep people out of the loop because information gives the holder some power. So it often happens that people do not get the whole picture and operate on limited knowledge, leading to bad decisions.

Crazy. I've worked in companies ranging from 10 to thousands of employees and never heard before of such a self immolating idea gaining wide acceptance. I must be lucky.