Earlier quoted context omitted.
Capitalism isn't a bad idea, it just needs proper regulation. What we have is an unregulated mess which gives both stupid and unscrupulous execs the advantage.
That doesn't answer my question, at all. What is it about capitalism that makes the strategy you describe a) inevitable, and b) worthy of regulation (since you brought that up)? Also, I disagree that the modern economy is unregulated. Quite the contrary, in fact. And it's regulation, bailouts and crony capitalism that protect companies who make awful products.
The profit motive covers (a).