I've heard similar Kafkaesque stories from German relatives of mine. And from what I gather, most digitalization efforts by state and federal government essentially resulted in digitizing existing bureaucratic procedures.
I moved to Germany about 10 years ago, and my wife and I bought a house here last year. I think the money went to the seller some time in October, but to this day, we're not just yet the official owner of the property because we're still stuck somewhere in the red tape. We're almost there though though (we hope), it's just that change of ownership of a house is a super complicated multi-step procedure here that must involve a notary! Good stuff. And mind you, I'm not talking about anything special about this purchase, just a young family buying a home from an ordinary person who moved away.
(We're hoping it's only a matter of weeks now, though, wish us luck!)