No, everyone got paid who was working there. But if it'd worked, the profits would've been taxed. As it is, the losses are kept private.

Losses are always public, these investors will use the loss against gains and therefore will pay less taxes, reducing the amount of government revenue.

Collectivized or public losses come into play when the government bails out failing companies so that shareholders don't get hosed for a bad investment. Shareholders getting hosed is the opposite of that; private loses.

Yes, the government doesn't get to take your money if you made a loss. That's not the same as what you're implying. The investors lost.