> The retailer's problem can be solved through diversification.

Perhaps in a textbook economy, yes; but in the U.S. economy that Massdrop operated in, continued sales of products hinged upon wages being available to spend on optional desires. That economics assumption has not held: most people’s inflation-adjusted pay decreased over Massdrop’s lifetime while the inflation-adjusted costs of necessary goods increased (thanks, enshittification and shrinkflation!), and so their potential customer pool would have been steadily draining throughout their operating years. The private equity model of ‘diversify to generate horizontal revenue’ only functions in a wages-dropping economy for retailers selling necessary goods, such as Walmart; for Massdrop, whose goods are exclusively non-essential, they had little chance to survive by increasing product diversity. (And effectively none whatsoever, considering how small their niche was to begin with!)