100% agreed, but for the CEO's who are making the above mistake, if they have other bad news to deliver to the board (low revenues, etc), then they might be afraid to deliver yet another piece of bad news on the hiring side.

Yep, and a mis-hire is one of the easiest problems to push off. You can talk yourself into believing the first project wasn't a good fit, your management skills aren't good so it's your fault, and so on.

All of those things might even be true! But doesn't change the reality that you're burning 2-3 engineers of runway on 1 engineer with no valuable outputs.