People who never traded in their life and bought GME at $350 because reddit promised them big returns (I know a few in my friend circle) aren't smart investors taking part in a risky venture, they just suffer from fomo and have no idea of the risks
People who bought a few weeks ago may have made a risky calculated move though, I'm not denying that.
People who bought a long time ago and fomented the whole thing for a massive profit are definitely the only one I'd call smart, low risk, perfect execution, comfortable exit.
No one will make me believe that the people who bought at $350 are just as smart and taking the same risks as the people who bought at $5. They're not playing the same "game" you're talking about. Head or tails isn't the same as "guess the number I chose between 1 and 5000"
I don't know if "being the subject of an impending SEC investigation for market manipulation" makes for a low risk, perfectly executed, comfortable exit ;)
That's not to call their position indefensible, but I suspect some of the people who fomented the thing will have to defend it.
I'm not sure what's left that is "good".
This is not a normal part of the game.
Loosing a bet doesn't make you a not-smart investor. High risk ventures can be part of any portfolio. In a game of high risk and high returns most bets don't work out. I don't think any less of hedge fund people who "lost their shirts" on this. That is a normal part of the game.