Dogmatic adherence to a process that limits developer velocity and optimizes for correct code is very likely the wrong call when you have no customers.
I don't know the context and I don't know the particular business the OP is talking about. What I do know is that if you feel that your management is cargo culting development methodology (which really does happen) you can either engage them constructively or you can leave for a better company. Going in with a confrontational mindset isn't going to be a good experience for anybody involved. Case in point: the OP is still upset enough that he feels it necessary to vent about this in an online forum.
Note that this is the same person who in another comment wrote:
"On the flip side I’m trying to convince my CTO to fire half our engineering team - a group of jokers he hired during the run-up who are now wildly overpaid and massively under-delivering. With all the tech talent out there I’m convinced we’d replace them all within a week."
> Case in point: the OP is still upset enough that he feels it necessary to vent about this in an online forum.
I apologize for the conversation starter.
If you're wondering why software is crap: it is because every new generation of coders insists on making all the same mistakes all over again. Learn from the past, understand that 'good practice' has been established over many years of very expensive mistakes. 12 engineers is already a nice little recipe for pulling in 12 directions at once and even if they're all perfect they can still learn from looking at each others code and it will ensure that there are no critical dependencies on single individuals (which can bite you hard if one of them decides to leave, not unheard of in a startup) and that if need be labor can be re-divided without too much hassle.