Ad revenue can be down 40% if your overall paid workforce was reduced by ~85%. It wasn't working out for Twitter either way, if they wanted to be profitable then something had to change.
As an impartial non-Twitter user, I think it's safe to say that neither version of Twitter was healthy for it's platform or users.
Twitter has been profitable in the recent past and could be again. Drama was not necessary.
I think your claim on profitability is flat out wrong. If you think that's the case, what are the exact numbers you are imagining that would make Twitter profitable?
Twitter learned that they really had to take harm reduction more seriously if they didn't want to be known for things like that. I believe that their improvements there were part of what set them on the path to their later profits: https://www.netcials.com/financial-net-profit-year-quarter-u...
And as far as losing money goes, their "lean and mean" approach isn't doing so well. Ad revenues are reportedly down ~40% as the same time Musk is going to have to come up with billion-dollar interest payments.