alt Hacker NewsIt's not really regulation-driven. It's just what happens when the people buying software and the people using it are different. This is the standard problem of enterprise software is marketed to the IT department (which cares about cost, box-checking, vendor relationships, lock-in risk, bureaucratic turf wars, headcount preservation, SLAs, etc) with little or no regard for responsiveness to end user needs.
It is definitely true though that enterprise software for nonprofits (like education) sucks even harder than usual, because nonprofit IT departments don't even have the profit motive to align IT department and end user interests.
This goes even deeper than that.
Users don't choose their university by how good that university's software is (just as we don't choose apartment complexes and power companies this way). This gives university IT no incentive to deploy software that doesn't suck.
Banks and cellphones also used to work this way, until they suddenly didn't, which was quite a shock to the existing players in the market.