It's hard for me to get too upset. Personally, it seems a bit conspiracy theory to think it's people might read negative reviews. Seems more likely it was a poorly used resource and Netflix didn't see the value in continue to support, maintain, and screen it. That aside, it points to a couple of issues. There is a lot of bad content on Netflix. It never had a good film catalog and their TV strategy has clearly evolve…
Are you sure? I feel like Netflix is making more data-driven decisions now than ever. If they aren't producing a constant crop of "HBO-quality" show, I would guess that that's because the data is telling them not to.
Consider: television networks have been in Malthusian competition for decades. You'd think the quality of the median TV show would increase. Instead, it seems like the quality of the best TV shows (on every network) consistently increases, but the median show stays the same. Why?
I would personally hypothesize that it's down to a not-oft-mentioned part of consumption psychology: people don't actually want to consume an indefinite stream of high-quality content that they need to give their full attention to at all times, any more than they want an indefinite stream of world-class meals or a radio station that consists only of their favourite music. Nobody has the time, or emotional capacity, to devote to consuming it. People want "bland" content just as much (if not more!) than "rich" content.
And, as licensing deals fall through and Netflix loses both bland and rich content from their catalogue, they have to replace both of those with their own offerings to keep viewers satisfied.
(Have you ever looked in the fridge, and seen that you have the ingredients to make several great meals—but those meals, you are planning to have at specific times with your significant other later in the week; and then realized that you have "nothing to eat" because there are no non-great meals you can make? Consider the television equivalent. That's the problem Netflix is trying to avoid here.)