I wouldn't blame academia for that — this has looked exactly like the classic way companies founder once they get large enough that your ability to get rewarded is completely decoupled from actual business performance. Many businesses have the same dynamic you described where improving “someone else's” project doesn't help your career nearly as much as denigrating it and reinventing the wheel, hopefully round-ish.

At a large company, you can coast like that playing politics for many years — in Google's case that's especially easy because Ad Words means they have little fear of running out of money and Gmail was big enough to ensure that any new messaging service which integrated with it would immediately “have” millions of users even if many of them had been trained not to use it by that point.