To be honest, the investors knew what they were signing at the time. If they didn't do their due diligence to figure out how the application was going to make any money, they deserve what they had coming for them. That's the kind of shitty "let's throw money out the window, in case we hit one successful startup" attitude that'll get us in a bubble.

Founders acting in their own self-interest? That sounds like capitalism in action to me.

I believe it was highly criticized even at the time...

This is hardly unprecedented, it has happened for oversubscribed companies that subsequently imploded multiple times in the last few years.