I don't think that the issue is actually the idea or even the fact that they are clearly incompetent
The issue was the launch. Let's look how it went
1) teased about the launch for months, which stretched into multiple years, also talk big about possibly making recommendation labels that would be coveted by all companies, including giants like Intel or Nvidia
2) during this time, when people thought that it was finally time for the launch, they only delivered "unboxing" of machinery and equipment worth tens of thousands of dollars [edit: each] (even the real kind of dollar, not just the Tranada kind)
3) the first few videos had major issues, excused with "we are still learning" (+ the Gamers Nexus callout video, although that obviously wasn't planned by Linus)
Point 1 and 2 made it nearly impossible that it would become somehow popular, and then point 3 killed any hope. He aggressively rebelled against the idea of "underpromise and overdeliver"
Anyone who works in organizing events or products launches know that you have to time the announcement correctly. Too late and people don't have the time to get excited, and too early and people forget. He basically did the equivalent of Kickstarter never delivered projects: people started to hate the project as they saw it never got delivered and that they were fools for being excited.
While at the beginning it seemed a difficult thing to deliver, it also didn't seem impossible. As the unboxing videos continued, it became apparent that he was not appreciating how difficult it would be, having his classic "I know best, stfu you peasant" attitude which obviously many did not like.
I don't think he would have ever been able to reach his goal of having Intel paying for a sticker that said "LTT recommended", buuuuuutttt he is famous enough on youtube that he should have gained an audience to at least pay for staff and slowly recoup the cost of the equipment he bought (idk how much he bought vs how much was donated).
I haven't watched in ages, but he also took a long time to develop the screwdriver (and backpack). I wonder if that made him think that announcing very early would be a good thing.
Maybe it is only that the Labs videos are shit (and their analysis is substandard as well), while the screwdriver seems a good screwdriver (grossly overpriced, but it does the job, just at 10x the price). The backpack was not great, but it has limited damage in terms of cost. Now a whole team of staff? Admitting that he was wrong? His pride is invaluable