There isn’t much of a horror story here, I don’t think, it’s just the disconnect between what they thought a niche game from a company with a pretty solid hit on their hands would do, and what it actually did.
Important data for people who don’t have the luxury of having a hit though, indie games should ideally be done as a hobby or by people who won’t miss the money in case it flops, because statistically, you’re not going to get a huge paycheck out of any game.