It's all politics. In the cities one of the primary functions of the building dept is to encourage the use of local contractors that pay taxes in the muni.
I lived in on city that required you to get a permit to replace your own water heater. I got the permit, replaced the water heater, called for inspection and it was red tagged. Called a friend of mine who was a contractor, he gave me a yellow city tag and said to hang it on the heater. I hung the tag and called the inspector , he saw the tag and said it passed. That's one of the reasons I now live in the country.