* CEO gets a golden parachute and finds a new job. A competent CEO will always find a job. A turn-around is risky, and a failed turn-around will have exposes and will ruin a career. Easier to stay-the-course.
* Workforce is laid off, struggles for a few weeks, and usually finds new jobs. The layoff sucks, but turn-arounds involve equal layoffs (and indeed can be harder to find jobs after; my employer went out-of-business is a mighty good reason to leave a company). Employees also hate change; in many cases, finding new jobs like old jobs is easier than re-qualifying.
* Shareholders lose a little bit of money, but are pretty diversified, and from a 50 trillion market, GME even at its inflated valuation is around 1/20th of a percent.
... and new ventures come in and fill the gap.
Capitalism is built on survival-of-the-fittest. If a company is not fit, it's sometimes more humane to kill it and replace it with a fitter company than to keep it straggling along. Companies aren't people; they're abstractions. There's no moral remorse to replacing a company with a better one. If you're running DBCorp which has a mediocre, buggy product, and a mismanaged workforce, and I run DBInc which takes your customers, hires your workforce, and has a high-quality product and well-managed workforce, in the end, everyone often ends up happier.