Having a cash cow distracts companies from the future. It makes them complacent: ‘Look at all the money (still) rolling in.’ It makes them think that if they just tweak this and that — if they can still get away with raising their rates even as their audience and value are shrinking — they will continue to keep milking cash from that old cow. It makes them overly cautious: ‘Nobody hurt Bessie!’
And politically, the guys in charge of the cow don’t want anybody inside the company competing with them: no new products, no new power centers, no one else to set strategy, no one else to use resources. They win because, of course, they’re the ones bringing in the cash. Nevermind that they’re the ones stopping the company from building for the future. They’ll tell you that’s not their job. They’re there to protect the cow.