I worked at Lindows/Linspire so below is obviously biased.
> The desktop was under-powered
It was the first sub $200 PC, what did you expect? The PC actually sold very well.
> their software manager lacked too many apps and... it still suffered from dependency hell - leading to breakage.
It was Debian under the hood and later Ubuntu and had every package in respective apt repo. It made available every major GUI based desktop app at the time via a graphical installer as the target user had no clue what CLI was nor “apt-get”. This turned a lot of existing Linux users off but they (you) were never the target market.
Linspire also made huge strides in specifically addressing dependencies including developing a package manager called Opium (https://cseweb.ucsd.edu/~lerner/papers/opium.pdf). A number of these features went on to be folded directly into apt itself.
> Linspire's attempt at low-cost did Linux a lot of harm.
To the target market/user Linspire did far more good than harm. To the community, Linspire/Lindows gave back a ton. This included:
- Financial supporter to Wine
- Financial supporter to ResierFS (far ahead of any filesystem at the time… horrible tragedy what happened with his wife Nina)
- Financial supporter to Debian (RIP Ian)
- Financial supporter to Mozilla Firefox/Thunderbird (ex. inline spell checking was first found in Linspire)
- Funded gaps in applications such as NVU HTML editor
- First sub $200 PC in retail store
- First commercial “app store” (https://en.wikipedia.org/wiki/CNR_(software))
- Was sued for Microsoft for trademark infringement and walked away with $20 million (https://en.wikipedia.org/wiki/Microsoft_Corp._v._Lindows.com,_Inc.)
- Fastest Linux installer at the time by wide margin
- Early adopter of Haskell
- First distro to use Bittorrent for distribution
- Funded Desktop Linux Summit
- Funded initiative to translate major apps into 50+ languages
All told Linspire put millions per year back into the community. One can argue business model to death but over 10 years of hindsight now show that consumers simply had no appetite for commercial desktop Linux (nor do they still).
Where Linspire really fell on its face was running as root. There could have been much more elegant solutions to solve this but decision was solely outside of engineering.