You're assuming the author is constantly revising and improving the work. If I massage your ego enough while running out the clock I could probably save myself a lot. Of course, the market would change and authors would offer shorter options and so on; I'm just pointing one perverse incentive that would become available.

It just seems like a stretch to me that they'd be able to string an author along for five years after being given the final draft. After a year without progress I feel like most authors would try another publisher.

Publishing deals often revolve around exclusive options. Also, publishers often wants to bring in a third person as an editor, market a book or a film at a particular time during the annual release cycle and so on - often for entirely legitimate reasons. It's not that publishers are inherently morally worse tha autheros, just that their interests aren't perfectly aligned, and short copyright terms shift the incentives strongly in favor of the publishers because they have more economic resources than the typical author and can better afford to play a waiting game.