Is there some myth building here? I know an executive for a big time national insurance company who has no qualms about doing his own wiring for all his rentals, and he has little knowledge about what the code requires. When I pressed him for info about how his company deals with non-code installations which result in a house fire, he acted like there was no real concern for the details for such "small potatoes" claims. He told me all sorts of stories about faulty wiring in burned structures, and yet they continued to pay out -- without going after the installers (I assumed that they couldn't go after anyone, since there were no records of who did the wiring).
Seems to me that if the inspectors and their agencies don't accept legal liability for the works they inspect and pass, then they can be just an extra cost -- especially if the insurance companies don't care (assuming there is no loss of life).
I can understand how inspections often serve as a spot-check against the fly-by-nights, and the occasional screw-ups, and perform a valuable service in educating the installers and the public, but without the legal liability they are free to abuse the position and just add cost to the job.