When I think about the workplace, I've usually interpret this version of stupid as a way of saying that there is a type of personality where the compulsion to do something completely overrides asking themselves if that thing should be done in the first place. The end result is exactly what you said - shotgun frantic activity because everything needs to be done and everything is a top priority. They are not stupid per se, but they create an astonishing amount of stupid and wasteful activity.

Unfortunately there are people who really are just stupid as well. I'm sure in the Armed forces that can have deathly consequences.