There’s also the need to assess the possible cause of failure. If the company is so bad at being a business, a bailout is more questionable. You could end up propping them up forever.
For something like this, where the possible cause of failure is arguably not an ongoing issue, putting them out of business hurts a ton of people and economies. Moreover, Europeans are much more socialist than Americans.
There just isn’t a lot of good reasons why you’d want to fine a VW to death.