Another place where good software work is done is Broad Institute. The reasons are as follows: (a) Broad can hire the best people in bioinformatics, (b) they are a relatively large organization where focusing on the process pays off. Software ultimately is process (i.e. how you do stuff) and small labs often cannot afford to focus on the process and instead try to reach the goal (i.e. publishable results) more or less directly, regardless of the inefficiencies they may encounter.

In the past, the model of having many small labs in universities was a great idea. Today things are looking a bit different in some fields because larger labs can afford to do more automation (by hiring programmers instead graduate students).