I’d have bought it as a raspberry pi in a cardboard box. Is there a “fail faster” lesson to consider? Would a lesser initial product have helped reduce the scope for manufacturing and maybe helped avoid some of these pitfalls?
Having been involved in many hardware startups, the story reads like they spent WAY to much on industrial design for a unit that was going to mostly sit in a dark corner, and WAY to much on bespoke hardware when COTS stuff would have been fine.
They also seemingly had nobody on the team heavily experienced with OEM/ODM supplier arrangements. There is no reason to wind up as an extortion victim to your suppliers if you go into the arrangement properly.