A sort of corollary to the banality of evil is the notion of the insanity of the banal, something that underpins the evil that can be done in a rigidly-ordered system and makes an effort to explain it. In a world where rules are rigidly enforced yet too byzantine for an individual to comprehend, seemingly random occurrences can occur despite being in full compliance with the routine. Worse, acts of grave evil or at least petty injustice can occur solely because that's what the rules say and there's no reason to think about things beyond that.
The best example of this is probably Terry Gilliam's film Brazil. No one in its intensely bureaucratic society knows all the rules, mistakes cannot be corrected because the system doesn't make mistakes, and you can be terrorized by your fellow man solely on the basis of which forms have and haven't been filled out.
Within Costikyan and Goldberg's own work, this is the fundamental conceit of "Paranoia": Friend Computer controls everything, is never wrong even when it contradicts itself, is acting perfectly rationally even when it is being utterly arbitrary, and any deviation from — or sometimes adherence to — its whims tends to result in player characters getting excessively murdered for no particularly good reason.
The point of these works is that a sensible, regulated society that runs on the letter of its laws isn't actually sensible at all. It isn't even sane, and the people who go along with it in lockstep are more dangerous than lone psychopaths because they're working to perpetuate a dehumanizing system that is always just one typo from committing atrocities.