If they were merely illiquid then we should not have closed them but supplied liquidity.
Either way, Theil is not to blame, at least not for this.
Bank runs are a psychological construct, not an economic one. They are based on rumors, not facts. Deposit insurance is intended (and usually successful) to prevent runs by ensuring that depositors will be made whole even if the institution does become insolvent, because a run will destroy any banking institution.
The failure of SVB was caused by those who rushed to get their money out based on fear.
Hour by hour I am in horror at the standard of "normal" that people will defend because they can't see it for what it is or imagine an alternative. Capital capital jobs jobs! Hoorah! This is the way.