And there are modules in z/OS that are very old, and have never been changed, because there was no need to.
My impression of IBM is that they are very business-case oriented, as in "how many new customers is this change going to get us". For example, there is a utility, IEBGENER, that can copy a file while shuffling fields around, or adding literals to the records. You have to give it a control card that says how many fields it will be working with, and how many literals. It uses this to figure out how much storage to use. It could easily figure this out from the subsequent control statements, but when it was written in the '60s, mainframes had 1 or 2 megabytes of storage, so they wanted to keep it on the simple. If IEBGENER were an open-source program, a developer would have fixed it to figure out itself how much storage it needed, just because the current way is a pain in the butt. But doing so is not going to get IBM any more customers, and not doing so is not going to lose them any customers. (There is also the disconnect in corporate environments between the people who use the computers and the people who pay for them. If something causes a bunch of downtime, the money people will notice. If it just gives the users a headache, they probably won't.)
So there is a lot of old stuff in there that has never needed changing, as well as a lot of stuff the isn't needed anymore (like seven-track tapes, and talking to Friedan Flexowriters) but isn't hurting anybody, so leaving it in is less risky than taking it out.
Bottom line is that there is a lot of really old code living next to a lot of state-of-the-art code.
The object-code compatibility with 30-to-40-year-old code is, IMO, a piece of marketing genius. First, as you mentioned, there is the issue of lost source. (In one of my past lifetimes, one of my specialties was disassembling PL/I programs for my company when the source had been lost.) But also, at least in the days when IBM had some mainframe competition, think about if you need to get a bigger computer. If you get another IBM mainframe, you don't have to change anything. If you get a different brand, you have to recompile all your production programs, even the ones where the source doesn't exactly match the compiled code, but you don't know it yet. If IBM made you recompile everything when you upgraded, it would be a lot less sticky.
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