i think it was just standard politics, everybody had to take a haircut, and nobody in leadership wanted to fight for that studio, it didn't have a patron/protector. It got killed because no executive was championing it, not because it was bad.
While he did say those things, it doesn't mean anyone was willing to fight for it internally. This is why many external companies that do so well on the open market die and wither after they get acquired by big companies. Internal politics don't have to be rational externally.