It is crazy because it dilutes the interview experience and you never know when it's going to end and when they're going to decide (and actually tell you).
And why should you talk to all those people? Talk to the tech folks, then to the CTO, then the founder, then what, the VC investors, the whole board? Can the CTO not describe the company vision and how IT fits in that picture? It does smell of a lack of vision or an inability to delegate.
It's largely a way to dilute responsibility and spread blame. If a new hire turns out to be a failure then it's tough to point the finger at any one interviewer since they were all fooled. This type of diffused decision making process is typically instituted by the careerists at large organizations where being held accountable for any major failure will derail your chances of promotion.
And why should you talk to all those people? Talk to the tech folks, then to the CTO, then the founder, then what, the VC investors, the whole board? Can the CTO not describe the company vision and how IT fits in that picture? It does smell of a lack of vision or an inability to delegate.