There were high profile failures but we have had those recently too eg. pet.com (dot com) and color.com (post-dot com, domain has since been repurposed)
I think you're confusing people cashing out with actually creating a successful company. Yahoo is not what people would describe as flagship company, or pets.com or Ask Jeeves or myspace or Voat or whatever. The dotcom bubble made a lot of people rich, but most examples were at expense of bag holders.
if you believe the milton friedman approach to economics, a company has no other value in that what it can provide to the owner (shareholder)
take your millions while it burns and, as the parent said, never fly commercial again
They don't "take the money", there are other people that believe some things (profits/growth in a field) will last forever and will bring 10x return, so they are willing to give them the money.
If you go by current standings in the market, yes, Yahoo is no longer at the top. Yet Yahoo was one of the most valuable and influential tech companies in the late 90s, early 2000s.
The after effects were that it was virtually impossible to raise capital for a while afterwards, so the next round of founders struggled. But then interest rates went to practically zero and money got cheap so it was all good.
You're right, the broad market drags down all retirement savings and those who are about to hit the age of 60+ pay most dearly.
Almost all the "top players" in the dot-com crash died or lived on in relative poverty; only Google and Amazon turned out "very rich".