I've seen orgs that try to flatten too much end up with ICs basically left in the ether without meaningful direction which causes them to 'build to survive'.
In reality, I have a feeling that it would lead to even more encroachement, more doubling down and less useful work.
I completely agree with building the wrong thing is the root cause of a lot of failures. In fact, I think that AI has stopped a lot of the conversation of "Why should I not build this". Historically, that answer was ROI - why spend days/weeks/months on something that might not be valuable. Now I see people just saying "Yes, and" to all feature requests.