Apple's customers had been screaming for better stability for years and Apple repeatedly tried and failed to deliver a meaningful solution. Even MacOS 8 introduced very limited memory protection that didn't help much in most practical cases. In context, it's really a story about an organization's capacity and will to rationalize - this very nearly killed Apple as a business.
> In context, it's really a story about an organization's capacity and will to rationalize - this very nearly killed Apple as a business
What damaged Apple's Mac business in the 1990s might been due to tunnel vision and self-delusion, but the driving issue was a loss of obvious differentiation vs. cheaper PCs running Windows. They were all beige boxes with a serviceable GUI that ran the same software, and customers didn't see the value in paying Apple's premium prices.
With the return of Steve Jobs, Apple resolved the PC differentiation issue by refocusing on design in both hardware (iMac) and software (OS X); Apple also sidestepped Windows dominance by focusing on non-PC devices such as the iPod, iPhone, and iPad.