Well given the example of Kojima, Konami gave him so much freedom that MGSV became too expensive to justify itself and was left unfinished after 7 years.
Perhaps this is a two way street? AAA studios want to make ridiculously expensive productions, or else they wouldn't be going to Playstation or Xbox for a blank check in exchange for an exclusivity deal. I mean the artist, even the corporate one, wants to show off a pretty picture.
I get that upper management is always looking to reduce cost and increase profits, but are they the ones wanting to give studios a $100 million budget so a game can look pretty? Are they the ones asking for a grandiose game with a 16 sq. mi open world, mocapped and fully voice acted NPCs, 200 quests, and over 9000 objects? I don't know the answer to that, but to me it's out of character. Maybe they truly are just incompetent, they can make a pretty game and a decent game, but not a good one.