I worked at MySpace, specifically the middle tier where these technical issues supposedly existed (scalability), although I also worked on a number of user and non-user facing projects during my time there. You may consider me biased because of that, but I'd say I also have a pretty good view into the issue. The reason for MySpace's downfall is crystal clear to anyone who worked at the company and cared to look around and make sense of what was happening - it was catastrophic lack of leadership and vision in management and product, paralyzing political infighting, and general lack of competence at the top levels of the company's management. The people making the decisions would change their mind and requirements constantly because of this. There were numerous entire features that were simply not launched and abandoned AFTER they were completed because the management couldn't agree on how they wanted to "position them" (and they were great features). The top management level was in a constant state of political infighting, and that most likely came from fox and the way they ran shit. There was no one to judge and reward competence at that level, it was simply about who could cover their ass better or come out looking better. MySpace was huge, and everyone just wanted a piece of the pie.

One of the issues that stemmed from this was lack of respect for technology in the sense that no one at the higher levels saw the company as a technology company. They saw it as an entertainment or media company. That created the cultural problems on down that eventually contributed to bad products and shoddy implementation.

Now, the core technical part of the organization was actually extremely competent. MySpace was pushing more traffic than Google at one point in its heyday, and the site scaled just fine then. That wasn't an accident, I have worked with some of the smartest people in the industry there. But because tech wasn't the point for executives, those people were tightly controlled by non-technical management, and so products suffered.

MySpace could (and still can) scale anything, to say that they had a scaling problems by the time they got to their peak is complete gibberish. Over the years they have developed a very mature technology stack. No one knows about it because it's entirely proprietary. The problem was management and product that was basically... incompetent, and lacked anyone at the proper levels who would care to see and fix it.

EDIT: Some typos and missed words. I'm sure still missed some.