The paper highlights the problem in two words of the first sentence of the abstract: "shrink QA".
Corporations do it to save money,
and accept the loss of quality as the cost of doing business.
Therein lies part of the reason for the sad state of software today.
I don't think they underestimate the loss of quality. As for the consequences, "No one in this world, so far as I know ... has ever lost money by underestimating the intelligence of the great masses of the plain people" - H. L. Mencken
Corporations do it to save money, and accept the loss of quality as the cost of doing business. Therein lies part of the reason for the sad state of software today.