Yeah, there's a lot of availability heuristic, where you can easily see and recall the multi-billion dollar behemoth that exists today, but you can't see what it is preventing from existing by the resources it consumes. Just because Toys R Us was big and maybe you have some fond memories of it doesn't mean that it needs to exist. You can also see and easily bring to mind the acute pain of Toys R Us collapsing but tend to discount the ongoing low-level pain of slow death and stagnation.
One of the reasons why they get loans so easily is because these are asset-heavy investments minimizing the downside risk for the banks. As there are usually plenty of real estate and inventory to get at least some of the money back during bankruptcy. Which is why we see it so often in the big-box retail space.
There are plenty of investors who would lose out as Toys-R-US dies a slow death as well. Instead they were bought out earlier in the process at a relatively decent rate and the risk is shifting from the public market to the banks and private equity firms.
I'm not a big fan of these financial-market gambles and obsession with high-growth industry as the only viable model, but there was voluntary sales by the original owners/investors, as they saw it as the best ROI at the time vs a fragile future.
And as this company fails, that still means there is a market not being tapped for retail toy sales and smaller firms can come in to provide that value/jobs, at a size and business model better suited for the nature of the current market. Or other firms can absorb it such as Walmart by expanding their own offerings.