He still doesn't really seem to realise he needs to let go now. Move on. It's not a success.
Pity as the guy's obviously got talent. It's one of these things of keep trying as he's obviously almost there. Just with a different business idea. And something that other hackers won't have done 100 times before. And he needs to massively shorten his time to getting a product in front of customers.
I've been guilty of this myself at times and I think the reason why this happens is based in having invested X in a project already. If X is already in it then you're going to do that little bit more to see if you can get it to work that way. So, now it's X+a little bit more, and so on.
The longer you 'hang in there' the harder it gets to throw it out.
So, the conclusion of this is: Do your thinking before you invest significant resources in to a project. Test the waters while you can still walk away. Then find something that gets traction, preferably without you pushing it.
then go all out.
Still, I've been part of a couple of failed projects before I set out on my own and I'm pretty sure that I would have fared a lot worse if not for my prior experience. That saved me a ton of time and money.
I still found plenty of 'original' mistakes to make though :)
As others have pointed out, being able to give up on an idea that won't fly is part of being an entrepreneur.
Don't be too dismissive; he is honest, writes well, and at least has the "business sense" to make an honest public resignation to fate. A calculated show of weakness is strength, specially in a commercial entity.
You have too much emotional bonding with your project at that stage to see clearly.
The problem is that plenty of people will isolate themselves from criticism and actively reaffirm their connections with people that tell them what they want to hear (if only because they don't want to lose their friendship).
Giving up on ideas that don't fly is probably an integral part of every successful entrepreneur.
Just like successful VCs will turn down almost all of the 'maybes' in order to be able to concentrate on the winners. Why go after the high hanging fruits first ? It simply makes no business sense.
Failure analysis is the hallmark of solid engineering, it allows you to go forward instead of being stuck in the same place.
Whether you're looking at an airplane, a business or a piece of software, the same principles will apply.
Of course there is no point in continuously reading about the same modes of failure, especially not if those have already been 'dealt' with.
This person (although intelligent) is not being nearly self-reflective enough in realizing his actual faults... e.g. he didn't release early, he didn't test the market, basically, he turned his business into a "science fair project."
I think the root cause of this bad outcome for him is his failure to truly understand his own limitations and finding a way to get leverage to compensate for it (e.g. hiring a salesman). THIS DOES NOT MEAN that just by getting a co-founder, all of this would have been solved! No! It just means that you need to understand the basics of business!