Earlier quoted context omitted.
Potentially your "rival groups" will have a long term advantage now though. This might be bad for the graduate students that did the work, but could be good for the professor and group over the next decade. Graduate students need to think in terms of 4-6 years while forward looking professors might want to think in terms of 5-15 years.
That was without a doubt pretty bad for those grad students' careers. That kind of work shouldn't have been done by anyone without tenure.
A bad advisor wouldn't care what his students wanted, but a good advisor might still have students work on this kind of project as long as they were aware it wasn't going to help them get a tenure track position in the future. If they wanted to go work at a national lab doing HPC work and programing it might have been plenty ok for their career (This is what I am transitioning to now) or if they want to go work for a hedge fund or apple it might also be an okay option.