I've been watching early X-Files episodes after having been put in an alien frame of mind by Incident At Owl Lake. They're pretty good. The writing is taut, and the performances - especially Gillian Andersen, who, by the way, I must admit is much hotter than I realized when I was seven - do a good job of completing the fairly sketchy characters.
I just watched the episode "E.B.E.," where Mulder and Scully track a truck they think the conspiracy is using to ship alien technology. There's a scene in the beginning where the truck driver is being held by local law enforcement. They think they have him right where they want him, but then the sheriff walks in, releases the prisoner, and basically chases them off. He (the sheriff) is terrified of something and desperate for them to leave; as Mulder remarks in the next scene, "someone got to him." I.e., the conspiracy came and threatened him in some awful way - we'll kill your family, you'll lose your job, we'll release these incriminating photos, whatever - and coerced him into releasing the truck driver and being discourteous to our heroes.
Ok, think about it for a second: what kind of way is that to run a conspiracy?
We're talking about a sheriff. He's probably a democratically-elected, meaning he's a prominent man in his community, good reputation, knows lots of people. He has powers of arrest and investigation, more than a passing familiarity with the law, experience investigating crimes. He's been trained to fire a gun and probably has some slight expertise with hand-to-hand fighting as well. He has a staff that is probably, unless he's a notably bad boss, pretty loyal. All in all, while he may be tiddlywinks in the global scheme of things, he's not somebody you want to mess with on his own turf. Is it really worth picking a fight with him, if you're a conspiracy that operates under conditions of absolute secrecy?
Yes, absolutely, with sufficient resources you could bring this man down. You could blackmail his staff, smear him in the press, bring down official trouble from some oversight committee, whatever. I'm sure these are things that the global conspiracy is capable of. But really, is it worth anybody's time? Do they want to pay some highly skilled individual a hefty sum to do all of this delicate work (which must all be done, remember, in such a way that it's impossible to prove that somebody set out to do it)? It just doesn't seem like a good use of resources, even given relatively vast resources.
Besides which, if you threaten the sheriff, haven't you already blown it? Best case scenario, he folds, your truck full of alien technology moves on, Mulder and Scully are frustrated, great. But now the sheriff knows there's some kind of conspiracy. You just turned a skeptic into the believer. He doesn't know the details, he doesn't know what was in a truck, but he knows, and he believes. He now distrusts all of the organs of control you're trying to rule the world with - the military, the government, etc., - and to one degree or another, he's going to pass that on to the people around him.
So what an incompetent conspiracy! They don't know how to go about their business! What were they thinking?
Well, the thing is, that apparent incompetence does two things: it drives the plot, obviously, but it also informs the world. Because this is a world where this is a big conspiracy and Scully and Mulder have a chance of finding out about it.
This is a subtle point about the Masquerade. I'm used to media that take the inviolability of the Masquerade for granted, like Vampire. This becomes a bit of a joke in Buffy the Vampire Slayer, in fact, the idea that no matter what insane thing happens the general populace bumbles around and either fails to notice or makes up lame excuses (my favorite moment of this is in the first episode, when Cordelia says about a horde of attacking vampires, "they were an ugly way of looking. And Buffy, like, knew them!") But in the X Files, the masquerade is not inviolable. There's a conspiracy, and they're creepy and they have vast resources, but they screw up, and Scully and Mulder could expose them.
Basically, in the X Files, the Masquerade is an antagonist, rather than an aspect of the setting - and as antagonists, they desperately to be fallible. They need to do dumb stuff like pressure the sheriff. As a setting element, the masquerade should be absolute, because it allows the story to function, but as a "character," not so much.