Actually, I think it is the Peter Principle at work.

However, you have a responsibilty to your company to point out the inaccuracy of these assumptions.

The trick will be to do so without seeming to be a pain in the posterior.

Is there anyone else in your organization who sides with you on this issue?
If so, perhaps you could approach management, in a kind way, to let them know you are concerned about how these bad pracitices are impacting productivity and the bottom line.