Seems you’ve gotten quite a few answers for the “why this happens” and don’t like it.

Risk taking is necessary for a startup to reach success but once success is reached that needs to be tempered. Founders that are good at the vision part often aren’t that great at leading an already successful company but don’t have the introspection necessary to recognize that and try to hold onto their position beyond what’s healthy rather than pivot to a more suitable role in their company and letting someone who knows how to run a successful business take over.

There’s also a greed aspect for many companies that go public and become beholden to increasing shareholder value above all else. Even a good founder who’s also a good long term leader will be forced to do things that maximize quarter over quarter profit at the cost of long term goals, and if they refuse insisting on looking at the long term goals they’ll be fired because the shareholders have rights and can force the company to change. For a good example of this, look at Dell: Michael Dell brought the company public, the shareholders forced the company to prioritize quarterly profit growth which hurt the quality of the product, which was detrimental to the long term goals, so Michael Dell bought out the shares to bring it private again and focus on the long term. Something he couldn’t do as long as there are shareholders who aren’t on board with that vision and just want their return on their investment.

So, your “why” is not really one single reason:

For some, it’s the founder not having the skills to manage an established and successful business even though they’re the ones who got them to that point, but their ego won’t let them see that and they have to be forced out

For others it’s shareholder greed

And I’m sure there are several more reasons why companies do this

If these reasons don’t seem to make sense… Well, humans often don’t make sense and frequently make decisions detrimental to themselves. Our decisions often don’t make sense from the perspective of what’s the most sensible or logical course. If you’re asking why they do something, there’s a decent chance the answer isn’t going to make as much sense as you’d like, because humans frequently just don’t make sense.

And companies are run by these humans.