Buybacks inflate the stock price, which increases the personal wealth of CEO, employees, board members. This is pure capitalism - after all, these people want to maximise their wealth.

Might you be assuming that capitalism and free markets reach some optimal state with respect to how broader society functions? This is not the case - free markets theoretically price some good or service at it's fair value to whoever would buy it. But it says nothing about optimising value across society (not to mention other measures of how well society is doing) because (a) things don't actually work out optimally (b) people don't really act rationally