Its now like a natural phenomenon because its happening everyday. I think the reason could be some of those listed below
CONNECTION AND EXPLORATION
People want to connect and as well explore. Connection is what majority are seeking after in other to get what/where they want or increase their business or whatever. At the other hand, exploration is more or less using your connection to venture wide. In other to achieve these things, what you know can't really be enough. So you must be known or strive your best to know people.
Trust is another thing that brings us close to people and also makes us known. You might not be academically sound in an area you'd like to venture. But based on the trust someone has on you, you can be taken. Nobody wants to have an employee that's not reliable. And nobody wants to take the risk of trusting a stranger at the detriment of his/her assets, so the other person who's known, tested and trusted is taken.
EXPERIENCE/QUALITY OF SERVICE
This is basically what people are looking for in terms of service delivery. Everyone wants someone who can deliver a job as stipulated without compromise. And as such they rely more on those who they've been using than those who claims to know about the job. But at the other hand, the person who claims to know per say might give a good job or a better one than the first person.
People wants to favour their relatives/friends. They do so by giving them jobs or opportunities meant for those who really deserve it. And in turn progress is usually little or nothing at all. Favouritism is one thing that has hindered a lot of development in Africa, more especially Western Africa (Nigeria). Employment is more on who you know than the very person who's good for the job. E.g a lawyer in charge of ministry of power,etc. What knowledge can the person deliver apart from hiring experts.
There are other reasons apart from the aforementioned. Its pretty bad though, but there's no choice. I believe that's why, the world is what it is today.
Being someone who tries to see everything in a brighter light rather than dim I look at this issue a different way. I don't believe there is one specific group that has a hold on every aspect of every market. There are other ways to get around what may look like an issue of not knowing the right people: Just know different people.
I see the saying mentioned in the question as a general review of the power of networking. The more people you know, the more opportunities you have access to. This just makes logical sense if you really think about it. Others know of opportunities that you don't and vice versa. Having an idea or a particular skill is often useless unless you know someone who can help implement it or someone who needs to used it.
Take Henry Ford for example. He had an idea for an assembly line to mass produce automobiles. He couldn't do it since he wasn't really an engineer and didn't know the right people to bring it to the world. So, what he did was put together what Nepoleon Hill called a "Brain Trust". A group of people whose combined knowledge could put his idea to work.
I think that if you go about looking at the issue like that it makes a lot more sense.
The reason is because people control how things works in the world but things in the world does not control how people works, so things like talent, ability, understanding and experience are not definite so when you have all this you will still need people to make them functional but if you do not have people to make them functional then it means the things you have would remain stagnant.
However when you have people it is possible to have artificial talent, success and understanding as well as experience because all these things can be bought, gathered and also gotten because for everything original in life people have the artificial of them so people control things like talents and there is nothing you have that other people do not have. But if you do not have people then there is no way to actually activate the innate things you have.
So the things you have are like a car but people in your life are like fuel/diesel and if you have a car without a fee to activate it then you have nothing at all so the truth is that you will need more people in life and that is why a man's popularity or power can be accredited to the kind of people he knows that is why when rich people get into trouble it is always fear that they will escape judgement because of the kind of people they know in powerful places so it has become more of people you know than more of what you have sometimes if you have money it will not be able to buy power so sometimes it is really not about having just money but having people who actually proves how powerful you are.
So it is not about being good but about having people to confirm that you are actually good. So people are the one who makes decision the world is actually decentralized and whatever you get or whatever you own or whatever you should have or deserves depends on people in the first place