It is mainly a list of bad execution choices, but I have a hard time believing that there was really anything there that could be executed on successfully. There are at least three different ideas just in that article alone: "media sharing with your friends", 3D virtual worlds within Facebook, and Facebook gaming. It's not clear to me that the first two had any realistic chance of succeeding.
Oh, what the heck. Let's just let the snark out:
Enthusiastic Entrepreneur: It's a 3D virtual space within Facebook! Teens will love it. And they can share media and play games.
VC: I love it! Sure, the history of 3D virtual spaces is littered with a near-complete litany of failures dating from before the invention of the Web, but I'm sure Facebook will make it work this time! Also I love media-sharing, and have not seen any other proposals for doing that. Here's a few million bucks.
Some time later:
EE: You know, the whole virtual-space thing really isn't taking off, but we've gotten really good at 3D development, and I think we could do a kick-ass job making Facebook games. All the cool startups are doing it.
VC: But... we gave you money to do the 3D social media thing. You're not saying that was a dumb investment, are you?