Too easy to game: People are just going to gauge for themselves what management considers "not a bullshit problem" and report that, making sure that the blame rests on unpopular people or third parties.
Too prone to false positives: Any project which is genuinely going really well results in everyone getting fired, and the company absolutely tanks as a result.
Exactly, an effective CEO / Executive is going to be developing systems of accountability that align with company goals. It can't be based entirely on a set of gameable metrics. However this starts at the top. An incompetent board / CEO is going to create misaligned incentives which will cascade through the organization.
It seems to me that if you want to be a CEO that wants to stay connected at the ground level, then you have to actually do that: you have to know each engineer, and understand the work they’re doing on any given day. Naturally, this tightly constrains the possible size of the company. If you want to grow beyond that size you must accept that you will become disconnected and out of touch and all of the bs being discussed here will inevitably creep in.
Long ago I worked in places where the CEO did exactly that. "Management by walking around" (it even had the abbreviation MBWA) has fallen out of favor, though. People just don't walk any more.
Too prone to false positives: Any project which is genuinely going really well results in everyone getting fired, and the company absolutely tanks as a result.