I've heard plenty of "what else do I have to work with?", that has about the same meaning.

The politician's syllogism comes to mind: "Something must be done, this is something, so we must do this."

https://en.wikipedia.org/wiki/Politician%27s_syllogism

That at least acknowledges that it's an unsatisfactory situation, OP's conversation didn't even have that level of awareness.

Presumably someone, somewhere, thinks KPIs are a good idea.

Edit: but that person is unlikely to be subject to KPIs themselves.

Re your edit: Not necessarily. They may be a winner under the KPI regime, and may feel that they are less likely to be so under a saner regime.

For example, if I'm a manager that can make my people hit their KPIs, and my KPIs are about getting my people to hit theirs, then I'm subject to KPIs, and I like it. It's easier than making my people succeed at what really matters, and it makes me look good.

To push against this point I prefer KPIs, or something objective that I can be measured against, now that doesn't mean I like bad KPIs but the fact of the matter is there are always going to be KPIs the only question is how explicit or implicit they are.

When KPIs are explicit everyone knows what they are and can modify their behavior to optimize for their KPIs when all measurement goes away the new KPI is the arbitrary one held in the decision makers head, and now instead of it being an explicit bar that can be objectively used to make decisions the entire system falls apart into politics and emphasizing appearances over work because the only thing that matters with implicit KPIs are what everyone else thinks of you, which is much easier to manipulate than the amount of cash you brought in.