If “Made a bad game and then tried to sell a new game” disqualified a company, literally nobody would’ve bought D2 at launch. And they would’ve arguably been making the right call.
Launch D1 was very, very bad. Clunky, poorly thought out, and just kinda bland. It took 2 years for D1 to get actually good, culminating is a pretty darn good Y3 by all accounts.