Forget the talk about bubbles and corrections. Can someone explain to me the rationale of investing in a product, marketing it, seeing that it drives consumers away from your product and erodes trust, and then you continue to invest at an accelerating rate? Good business would have driven us very far away from this point years ago. This is very deep in the "because we can" territory. It's not FOMO.
Eastman Kodak tried your implied proposed strategy, of ignoring technological developments that undermine their core product. It didn't go so well. Naturally technology companies have learned from this and other past mistakes.
Kodak operated in a region that was a manufacturing and technology hub until the mid 1900s. The region started to decline significantly in the 1960s. By the 1990s it was basically a ruins compared to the 1950s.
So by the time Kodak made this strategic mistake, I imagine they already would have had a hard time recruiting talent into that obviously dying region for a decade or so, and many people who were there already were actively leaving the region by that time.
I suspect that in the counterfactual where the region stayed as it was in the 1950s in terms of economic prosperity, Kodak probably could have successfully played catch up once it was clear where the game was going.
So yes they made a strategic mistake, but they did so while simultaneously “brain drain” bleeding out due to other unrelated factors.