The problem is that in addition to representing the line workers, the union also manages the entire department. It controls everything except setting the department's budget.
It would be like the C-executives of GM being part of the United Auto Workers union. There would be zero accountability for anyone, and the interests of the shareholders would not be represented well.
Unions must exist in an adversarial relationship with management - it keeps all parties honest. If the union takes over management, you get a disaster.
The issue is that I think most of us agree when it gets to the level you describe, perhaps that's not a job worth doing.
It's easy to see how it gets to that point though. Friends in the union might not care who is in the wrong, and selective retelling of the facts can get other union member up in arms about the "raw deal" their fellow member is getting, so it's probably easier for the union to just protect all but the most egregious behavior against non union people. I imagine that's just how the incentives work out.