It seems like the real problem was burnout among the rank-and-file, not Gabe Newell's perfectionism. The staff seems to have had more fun with a goofy new IP like Left 4 Dead, versus a serious plot like HL2 where any perceived narrative misstep would be severely criticized.

If they shoved the episode through and lost a lot of staff, then that would be a Phyrric victory. Contrary to some opinions here, Valve did not owe a single thing to HL fans, and they had no obligation to finish the story.

They don’t have that obligation to finish the story, but Half-Life 2 Episode 2 immediately retcons the ending of Half-Life 2 to give you more play in the world. Half-Life: Alyx, the entire game is a retcon of the ending of Episode 2. So to sit and claim there was nothing narratively interesting to work with and not a good direction to go in, is ridiculous because they always had a an escape hatch with the retcon.

A company that has failed with sales of Portal 2 but has plenty of operating capital to continue on, Half-Life 2 Episode 3/Half-Life 3 at the very least was a promise they made and walked back. Yes they did owe something to the fans over the last 20 years.

They were the ones who set out to outdo the previous episode and let the idea blossom into never good enough, not the fans.

Yeah, the ice gun and blob baddie would have blown my mind even if they were 5 years late or whatever. I'd still love to play with them.

Depends how you look at it. Admitting you are in over your head, that you cannot do justice to an ideal and choosing to step aside (despite market demand being secured), could be seen as an act of humility, as an act of respect and reverence.

An ideal they had full control of shrinking and growing, they grew it then said “it’s impossible” without trimming their own expectations.