The company can't sell shares it doesn't own. Think of it like a startup founder borrowing to buy out someone else's equity. If interest rates are near zero, it may make sense to borrow cheaply now to buy back stock that the company can then sell later when it actually needs an influx of capital (presumably when interest rates are higher and the stock has risen a bit). It's essentially a financial bet on the company's future prospects.

The market isn't perfect but if companies are really mortgaging their future to provide shareholder returns today, that would seem to be something easily noticed when analyzing the company's financials... thus weighing on future profitability and acting as a counterforce to the boost from the buyback.