This is a risk that occurs in any "representation" capacity -- be it diplomacy, or regulation...or even advertising and sales.
Representatives should intimately know the wants and needs of the host country, regulated industry, client or customer. Sometimes, though, there is a tendency for the representative to relate to the host, client or customer -- to his country's, or constituency's, or employer's detriment.
It is the role of management to insure that this tendency is suppressed. In the diplomatic trade, it's called "going native". In sales, it's called "taking the customer's side". It's one of the reasons for "rotation" -- changing a diplomat's country, an agent's account or a saleman's territory.
Obviously, it has been a long time since State Department management exercised their responsibility in this regard.
Or, now that I think of it, in any other regard, as well.