We also believe in:
- the tooth fairy
- SantaClaus
And many other such examples besides. All that wriggling in order not to find a reason to resign and show some conscience. Either that or be blunt about it, what he really should have said was:
"Yes, Khashoggi was murdered. My investors unfortunately are lying murderous scum but I still have a company to run."
The "rogue operation" story is "good enough". It's plausible. That doesn't mean it's true of course. It doesn't have to be. Nobody has to actually believe it. It's just good enough so that everyone involved can save the minimum amount of face required to move on.
The reason that the murder can be considered "a mistake" is that the fallout was far greater than estimated. Consider that the Saudis are killing political opponents all the time with very few issues.
It's probably the grandeur of the plot that made the difference here. If Khashoggi had just been shot in the streets by "unknown assailants" (Putin style), it wouldn't have been that big a deal.
It is plausible in the sense of "plausible deniability". Imagine MBS saying something like "That Khashoggi guy, I wish somebody hacked him to pieces!".
You can interpret that as an order, or you can interpret that as a more casual remark of frustration. If you're ordering a murder, you may well want that kind of ambiguity in the order.
Furthermore, sometimes an unwise underling implements the perceived will of the dear leader in a way that is counter to their interest, e.g the assassination of Pompey "on behalf" of Julius Caesar.
In hindsight, it wouldn't make sense for MBS to order this killing, but it would make sense for a rival to blame the murder on him. That's hindsight of course. Equally plausible is the scenario where MBS is so self-absorbed, he orders the killing without regard to potential consequences.
But he didn't, and squirmed with a few "well, you're obviously deeper in this than I am" indications that he wasn't well-prepared on this issue.
It's tough for a CEO to go from talking to the press about the tech behind their tech company to talking about everything else in the world – that's what the CEOs of conglomerates and oil companies spend decades of their career being groomed into. In this case, he's learning on the job, the hard way.