An interesting article about Blackboard, the major provider of learning management systems. As a previous WebCT user, my own institution has become a Blackboard customer by default, and subsequently become involved with Moodle, so we fit well into the general picture drawn. I have little direct knowledge of learning management systems, but I do know something about student data systems, and there you see some of the same issues with a lack of innovation in products, but seemingly insufficient profit available (and/or insufficient risk tolerance amongst institutions) to tempt in new providers and disrupt the position of the incumbents.
Procurement people have a saying that you get the suppliers you deserve, and I think one of the important contributors to bloat is precisely our inability to procure and then benefit from really good IT. This has something to do with universities being professional bureaucracies, so it is likely to be difficult to change.