Are there software applications that function both as a content authoring system and an LMS? Or is the only option to create SCORM compliant content separately then import it to an LMS?
Yes. There are plenty of systems that allow you to create content and deploy. Here's a caveat, though. Many systems that do both do not do so via SCORM. Take Moodle, for example. Moodle allows you to create content. It allows you to export that content via SCORM. Moodle also allows you to import SCORM 1.2 content. But, by default, content is not necessarily delivered via SCORM.
Should it be? Not necessarily. SCORM allows for interoperability, but in doing so, it restricts what a piece of content can communicate. If an LMS allows the author to create content that is more communicative than SCORM allows, I'm all for allowing those interactions to flow.