You just fell for the "in goes more money, out come more hits" fallacy.

As OP said: the content business is not normal. You can't assume that big budgets == big success.

They said more content not more hits. In the content world quanity gives best chance at finding that rare hit.

Make 29 original shows, feel great if one becomes mainstream popular.

This is true, but it fails to take into account back catalog the legacy media companies such as Paramount, Disney, NBC Comcast, and to some extent even HBO have to fall back on. They gain subscribers simply to watch the content they made 20+ years ago, and then on top of that, have in many cases just been running sequel and spinoff series on things they already know work. Sure, not every spinoff series works, but it's sort of like they're throwing darts at a known dartboard in a well lit room; Netflix is throwing darts in the general vicinity of where it believes a dartboard to be based on the sounds its heard from getting lucky in the past in a pitch black room. The consequence is that Netflix pays a lot more money finding its hits than its competitors do.

This isn't insurmountable, and Netflix has shown itself to be full of innovative means of handling this reality. But while the bulk of the last 10 years was just gathering subscribers to pay for other peoples' content (remember, until recently, The Office, Friends, Star Trek, and Disney movies were ALL on Netflix), the next 10 will require them to do more in the way of finding original content that works, and acquiring things from smaller/foreign studios (a la Squid Game). They've got practice, but they've lost their money printer.

it might help if they didn't kill shows a week after they are released so the get the chance to become mainstream hits.

Rarely does a show get killed halfway through a season unlike network tv where your favourite pilot only lasts 4 weeks.

The problem is rarely does a show last more than a few seasons and that is mostly because of how contracts are written where you pay low for an unknown actors for 2/3 seasons and when those contracts are up for renewal you move on.

On network tv after 4 seasons it can be sold for syndication so many shows get cancelled. For netflix the money spent on new seasons keeps existing customers but does nothing to attract new ones. This forces netflix to create new shows that hopefully attract new subs.

If it were this easy, why wouldn’t paramount have done this for the last century?

Paramount has done just fine for the last century. If you mean as a streaming platform, they only recently started even trying...and thanks to Star Trek, they've had a pretty decent start.

Who’s making the shows and what are the shows?

It’s not as simple as throwing poop at the wall and hoping a bit of it sticks.

I feel it goes without saying that big budgets = more (and better odds) opportunities for big success because you can afford to take more cracks at it.

I mean, it’s not that dissimilar to VC funding: you make ten bets and hope that one makes it big.

More money in is more rolls of the dice though which is important. It’s also leverage to build/buy brands around successes which is basically the play all the big content publishers have made lately.