Most programmers don't know how to develop software very well. You shouldn't be surprised "biz guys" are totally ignorant. Most non-programmers think you can have marketing and design people come up with "specs" and then hand it off to have it "programmed". That almost never works and yet it's by far the most common method. People who think this is a good practice should be no where near the helm of a technology company.

Some web companies are not technology companies though. I think the "biz guy" approach works for those -- occasionally. Digg was a cheap project on elance. The success for that site was more about a TechTV/Kevin Rose community. MySpace is similar.

Facebook a non-technology company becoming one.