They should have closed out the team working on this long long ago and changed everyone working on this to making their newer chips work better.
I don't think so:
https://en.wikipedia.org/wiki/Pentium_4:
> Launched November 20, 2000
https://en.wikipedia.org/wiki/Itanium:
> Launched June 2001
https://en.wikipedia.org/wiki/Intel_Core:
> Launched January 2006
You seem to be basically claiming their downward spiral started before their biggest recent upswing, which doesn't make sense. Itanium (and the Pentium 4) were mistakes that they managed to recover from 15 years ago. However, it's only just being discontinued because Intel's not a company that's willing and eager to leave their existing customers in a lurch.
Edit: it sounds like HP was basically paying Intel to keep Itanium alive:
https://en.wikipedia.org/wiki/Itanium#HP_vs._Oracle:
> ...court documents unsealed by a Santa Clara County Court judge revealed that in 2008, Hewlett-Packard had paid Intel around $440 million to keep producing and updating Itanium microprocessors from 2009 to 2014. In 2010, the two companies signed another $250 million deal, which obliged Intel to continue making Itanium CPUs for HP's machines until 2017.
According the the article, the latest Itatium processor was released in, surprise!, 2017.
I don’t see intel just rolling over, I suspect it will just take some years for them to get back to a good arch, just as it did when they had their long P4 period leading up to the Core series.
In the coming years, any fab process innovation will see Apple buying up most or all of the fab capacity for the new process in the supply chain, locking other vendors out, meaning that in order to keep pace with Apple Silicon, Intel and AMD will have to build bigger, hotter, more power-hungry chips -- and then they're not really competing with Apple, just retreating into the enthusiast and high-end server hardware markets.