The cost is already sunk and the only alternative to forcibly extracting any profit is to admit they got suckered into the hype and burned billions of dollars for nothing

Sure, but the alternative is not really any better: if the choice is between being the guy who got it wrong vs. being the guy who got it wrong _and_ being the guy who persisted in throwing good money after bad, surely the former is prefereable. As far as I see, the fact that they keep going indicates that they genuinely still believe Copilot could pan out and become profittable in the long run.