To be honest, this actually sounds kinda healthy.
It's a forcing function that ensures the middle layers of a vertically integrated stack remain market competitive and don't stagnate because they are the default/only option
Yeah, makes absolute sense.
A bit like Toyota putting a GM engine in their car, because the Toyota engine division is too self-centered, focusing to much on efficiency.
The opposite, nepotism, is very unhealthy, so i think you're correct.
Sears would like to have a word about how healthy intra-company competition is.