Yes, that's one way of looking at it. But the business will have a harder time to weather bad things happening that would require a larger capital investment.

Plenty of businesses should just stay small. This fascination with scale and growth is super unhealthy. But continuing a business that already exists is easier than starting one from scratch and building up reserves just in case something that you really need for your primary process breaks takes time. So time will tell whether it really was dead weight.