Presumably because there was no significant advantage, or no sufficient incentive to do so. If the executive team is trying to raise the median salary of their employee base, however, there's now a strong incentive to outsource the lowest-paid portion of your employee base to contract work (even if contractors might cost marginally more), since it'll raise the median wage of your employees.
e.g. let's say my employees' wages are:
[1, 1, 1, 1, 1, 10, 10, 10, 10]
Now let's say I could replace each employee with a contractor by paying 0.5 more than the salary of an FTE.
In the above example, let's say I want to raise the median salary of my employees to 10. I could do that by either:
* Paying one of my employees 9 more (boosting them from 1 to 10), at a total cost of 9
* Replacing all my 1-salaried workers with 1.5-salaried contractors, at a total cost of 2.5 (five workers, each getting a 0.5 bump)
It's clear that I'd never want to do this if contract workers and full-time workers were just as favorable for me (since I'd be paying more to get the same work done). If all of a sudden the company were incentivized to raise their median employee's salary, though, all sorts of non-common-sense solutions can come out of the woodwork, and replacing FTEs with contractors (even at a cost) could be the incentivized solution.