Jack Welch called it the corporate immune system. Once you've been hurt, you tend to over-bureaucratize the response to ensure that it never happens again. I think it has to do with the fact that human psychology tends to over-value possible negative outcomes vs. possible positive outcomes, as well as a certain amount of future discounting, plus social signaling to show the problem is being taken seriously: you put a stop to the very visible, very current, negative event with little regard for a possible, future, positive loss due to bureaucratic build-up.

It's irrational, but so is most management in practice.