I'm going to say "yes they were dummies", what made them think that they were going to run out of space in 172.16/12 for router ID /32 loopbacks? If there are properly defined private IP space blocks, use those, not some random /8 you think looks nice.
>"If there are properly defined private IP space blocks, use those, not some random /8 you think looks nice."
Yeah, no. It sounds like you don't really know the history of that block. Or maybe you missed the part where I said it was used as a loopback address. Maybe both.
1.0.0.0/8 was unallocated and was also part of many peoples bogon filters at their edges.
I do know the history of that block, and have been subscribed to the relevant mail lists for bogon filters since 1998. It has never been a good idea to start using a currently unallocated /8 for internal purposes, when plenty of rfc1918 space exists. 1/8 is not the first block to ever be taken out of the bogons list and actually used. Some of the "newer" /8s that were in the last few handed out to the RIRs also had reachability issues when arin, ripe and APNIC started giving out /14 to /22 sized pieces of space to ISPs, because a number of people out there had stale bogon filters handcoded into their routers. It is mostly fixed now.
It is/was not uncommon either[1]. It was never a concern since it wasn't allocated. It being a concern is a very recent phenomenon.
[1] https://www.cisco.com/c/en/us/about/press/internet-protocol-...