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FWIW, I pretty much agree with you. I'm not terribly comfortable with the "Let it fail" philosophy, though; I would feel obligated to try to save the company/agency some pain if I could do it simply by pointing out some potential red flags
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I think that it would be a grave disservice not to wave those red flags and at least make my concerns known, in writing whereever possible. If the management team fails to address them, I can at least have the satisfaction of knowing that I tried to prevent, or at least minimize, the scale of the disaster.

It can be a very career-limiting move to thumb your nose and shout "I told you so", but you can always think it. :-)

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