It isn't a question of whether they're allowed to do it, it's a question of whether they should do it.
It's ineffective against insider exfiltration of data unless you're also doing body cavity searches for USB sticks, and if you're at that point then the sensitive network should not be connected to the internet at all.
And it's similarly ineffective against malware because TLS is not the only form of encryption. What difference does it make if someone uploads a file using opaque TLS vs. uploading an opaque encrypted file using MITM'd TLS? Banning encrypted files, even if you could actually detect them, doesn't work because they're often required for regulatory compliance.
It isn't worth the security cost. The situation in the article is bad enough, but consider what happens if the MITM appliance itself gets compromised when it has a root private key trusted by all your devices and modify access to all the traffic.
