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Do you think that employees stick around because the CEO/leadership says "we've got this new direction we are super excited about" and they would bail if they got "nothing... has created a viable business"? That is, are the employees who stick around happy to stick their heads in the sand as long as the leadership throws out the "we're excited" bone?I think you underestimate the capacity for people to delude themselves. Change is painful and a change that leaves behind a projects that you've invested heavily in is even more painful (sunk cost fallacy). Talking about the realities of the situation shatters that self-delusion.
You also fail to account for morale. We've all heard of tightly-knit teams who managed to succeed against incredible odds because they believed in what they were doing; the converse is much less talked about: teams that believe they cannot succeed, inevitably won't.
So, from a management perspective, it never makes sense to admit one is in a "Hail Mary" situation, even when it's patently obvious.
> EDIT: I should also say that I'd likely go to the mat for the person who's honest about the hail mary.
Bluntly, why? Your family and your future retirement depends on your income and career success. If the prospects for success are that bleak, how does it make sense for you to take on that risk personally? "For the good of the company?" For your own sake, I would hope not.