If you're stating that this is due purely to dead wood, then I respectfully disagree. The corporate IS team generally develops solutions that are meant for broad usage. The district "developer" is doing something for a much smaller and sometimes singular audience. The "abilities" of these types of development are quite different. Scalability, reliability, adaptability, flexibility, maintainability, reusability, supportability for large numbers of users and transactions are required attributes for customer facing, corporately developed applications. The district developed solutions generally focus on suitability to a narrow situation. These two types of applications are not the same and therefore cannot cost the same.
I understand what you're saying regarding the extra overhead. It certainly exists. However, to state this is the reason a district "developer" can do things more cheaply is a bit of a stretch to me.