That's not the whole story though. Public companies are punished greatly for making big bets that fail, or for making bets that take a long time.

For example, maybe Boeing has a design for a brand new plane that can carry 1000 people and go Mach 3. But it might take them 10 years to develop such technology.

The market would punish them severely for pursuing such a thing, so it makes more sense to buy back stock, otherwise they might get sued out of existence by their shareholders.

The market no longer values long term bets unless you are very special (Apple, Google, somehow Tesla). All those companies have mastered marketing their long term bets.

You say that like that’s not problematic.

I don’t think I made an opinion either way. :)

I think it’s highly problematic. It stifles pure research from the companies that have the most capital and talent to do it.

How is that at all different from companies issuing dividends?

Isn't returning value to the shareholders the entire point of selling stock to investors in the first place?

Even dividends would be more thoughtful than stock buybacks. Such things are usually planned out for quarters at a time meaning they reflect some moderately deep portion of the business plan. Buybacks are just saying “we have this money in hand. We could use it for R&D to grow our business in some way (opening new branches, new plants, or just anything that could cost money up front for more money later), but instead we’re going to plaster this cash onto the facade of the business. We literally have no better use for it.”

I mean I'm asking, how are they actually different, besides one being worse for the shareholders w.r.t. taxes? They both involve transferring $X to shareholders.

Dividends are also saying "we have this amount of money on hand or cash flow, and no better use for it, so here you go"

I don't see the difference. Stock buyback looks to me like dividends without the tax - imagine a dividend reinvestment plan without the middle step and the tax bill.