I am asking this because, as I mentioned above each page acts as its own canonical as per how the CMS is customized or how it is done in the dev process. So in that case, it makes this worse right?
Yes, it would make certain problems much worse. I've run into such a "feature" on a CMS. I noticed that it was using localhost as the hostname when we were testing, and I was horrified at the implications.
Fortunately, there was an option not to use the auto-generated canonical tag... but to enter it manually, and that's what we did. I've got it on my list to discuss this further with the developer of the url module. We spoke briefly when we put the site online, but I don't think he fully got it.