It's inefficient in the case of a wholly-owned subsidiary to require company A's shareholders to hire lawyers, setup bank accounts, books, etc. for a separate company B which ultimately provides the same limited liability vis-a-vis third parties. Joint-ventures become tricky between corporations. Corporations can't hold potentially toxic assets. There are quite a few good ones. Interesting nonetheless.

Also as with all corporate law questions, <other jurisdiction> allows it, so we'll just go there instead.

I'm not sure I understand your first point. If a company can't own another company there's no such thing as a "wholly-owned subsidiary". If you buy a company they become the same company.

I'll try to stick to one thought at a time.