Having users that want to return is objectively good. We've just taken this to the wrong conclusions.

I strongly suspect that this has to do with attribution and shallow "data driven" choices - there is a heavy bias towards things that are easier to measure. Especially in startups with limited resources.

Measuring retained users regardless of anonymous/known state is very hard and lossy. So the nearest easy to measure analog that is often picked is logged-in users and we start the fucked up cycle you mention.

Similar things happen around all metrics that have to do with retention. We know that a better experience through higher performance and better UX is likely to create happier users that return... but we cannot prove it (easily) so we focus on optimizing other things.

I've been in more product meetings that have uttered a phrase like "we will work out what to do with all these users later" than I care to count. It really is a startup goal to sign-up as many users as possible. In most cases it is literally a metric for the next funding round ("Last quarter we had 100k signups!" Is a very attractive soundbite at the round table)

The minute something becomes a KPI it is no longer a useful KPI.

That's how extreme shortsightedness looks like.

The number of users you lose by doing that is smaller than the number you gain as long as you don't have enough users (and spends enough on publicity). This is also the one thing that limits the number of users a company will ever have on most cases.