Markets can remain irrational longer than you can remain solvent.
John Maynard Keynes. Though maybe apocryphal.
This famouse quote from Keynes warns about the struggle between individual and mass.
At first I searched for some references about stupidity. But finally I found that conformity is actually a much more accurate term.
Pleasing the group, to be accepted or simply the fear of looking stupid to the rest, is enough for a crowd to maintain its behavior.
In the realm of I.T., a project may considered by the crowd as "too big to fail". Hence every participant will continue working for a given project in the same way as before, despite the actual convenience of those continued actions for the good of the project goals.
Actually, the success of a project might become a self-fullilled prediction. This is easier to happen for projects without a clear success criteria (success can be redefined); also when all parties (from sponsors to implementors or users) will be evaluated by the success of the project: if its convenient to all to declare the project a success, all will agree to it.
N.B. I choose not to use the Pygmalion effect as it describes a possitive attitude towards accomplishing a seemingly not possible goal. This can lead participants to creative ways to overcome difficulties. In the self-fulfilled prophecy described in this article the participants change the original problem to accomodate to their actual achievements.