This is an interesting moral debate - LA Noire was both a critical and monetary success AFAIK. Was this worth it? If you produce great art, do you have to worry about the "how"?
Plus nurturing the talent means they can easily roll into the next project with little or no downtime, which makes that project cheaper to complete.
So you can argue that both methods - being cruel to the employees and being very nurturing - deliver good games but take a lot of time.