Google is interesting. Choc full of academically bright people, yet collectively dumb as fuck. Shame there is not a phd for common sense or being down to Earth.
Smart is not necessarily nice. Without nice, incremental returns to smart may be negative. Furthermore, the terminal goal of a market is to give some group exactly what it wants. Such groups are often large, and their wants are defined by how their members act -- usually when others are not looking. A market does not care what anyone says they want.
I'm having trouble understanding the first part of your comment. For the latter I don't understand what you mean by 'smart'. Without some forms of regulation, people would blissfully poison themselves with dangerous foods (for example).
We have a guy on our team, let's call him Kent. He writes lots of tests, so many tests, mostly before he coded anything. Oopps. If he even prototyped a bit, he would have seen he was barking up the wrong tree. So he writes a whole battery of new tests. Now all his time is gone. He has to spend even more time. Let's call this the Martin syndrome.
We also have another colleague, he wants to have his cake and eat it. His name is David. He is now doing septagon testing. Does it benefit the project? Probably not, but it gets attention, and that's the important thing. For him.
Then finally, we have a colleague, who as always remains nameless and faceless. We never rwally notice these colleagues. They produce working code, with a few sensible tests as appropriate. They deliver for the client. They are not arching for book sales, conferences, blog spam clicks or anything else. They are the real professionals.
We learnt that Node wasn't cancer, but it also wasn't a good technology either. Still, it was useful in keeping the clueless muppets away, lest they fuck up other tech ecosystems.
Is TDD dead? No, it just smells that way. Like all cargo cults, only the clueless follow it religiously. You can spot them a mile off - with a book they bought off of pragprog, their whole test before breakfast mantra, and usually by their crappy brittle test forged code.
