It's not the initial investment, it's the continued investment after it was obvious to most people that it was a bad idea. That's what wall street tends to have objections to.
If you are talking about Wall Street investors, then they have no excuse for investing in a company that loves pet projects. They have all the research at their fingertips. I could understand if Joe from down the street invested $25,000 in GOOG and is now pissed because he thought they would try harder or whatever.
