That being said there was one guy in LA who built a massive house called the enterprise I think. Edit: he lost in court and is being forced to demolish it.
I've met a significant number of otherwise carefully law abiding people with various non-permitted remodels and even outbuildings. (I guess the latter won't work so well in the future now that we have regularly collected high resolution elevation maps). It really seems like something is wrong with how this is handled across most of the US.
The refusal to issue a septic permit noted in a nearby comment is a prime example. Such things should be "will issue" so long as they won't cause any health or environmental problems in that location.
The problem isn't that they're forbidden from using a septic field when there's a perfectly good sewer line nearby. The problem is that they're being charged $40k for a sewerage connection. Where I live, it costs only $1000 for all the permits and inspections required for a new connection.
I would have to disagree that the unreasonably high fee is the only problem there. Charging a captive customer an unreasonable amount is certainly abusive. But so is arbitrarily forbidding what is permitted on private land. Such restrictions should require clear and articulable justification based on real world impact.
This is really outside my wheelhouse, but I could see an argument being made about the capacity of the larger system.
E.g. The direct, marginal cost of installing service to your house is $200 to review the plans, send the guy out for an inspection etc. But the added capacity requirements of you and the 10 new houses in your development puts an upstream sewer out of capacity, costing $50,000 to upgrade. If you don't charge the full marginal cost through the whole system for the upgrade, either the rest of the city is subsidizing your marginal cost, or there's a significant monetary shortfall on the short (say 1-3 year) timeframe, and you'll hope a rate increase is approved to make up for it.
I don't know your profession but let's take a statistical guess and say you're a software developer.
If I asked you to drive out to my place to take a look at 500 lines of Javascript, and tell me if the code is kosher, and if you're wrong I'm going to sue you. How much would you want to be paid to do that?