That actually sounds quite a lot like the risk-averse business mentality that isn't uncommon in Japan. It wouldn't surprise me if there was just no decision to support it because the company was afraid to take on more risks.

Something like:
- Let's come up with a business strategy!
- We can add more features? No, it's too risky since we don't have the staff to properly support it.
- We can hire more staff to implement and support the features? No, it's too risky since we don't have the revenue to pay those staff.
- We need more customers before can add features or pay staff. What do we do?
- Let's wait until we have some more customers and then we'll come up with a business strategy!

...
...

Repeat for 1.5 years until someone decides there hasn't been enough growth.