My ignorance permits the possibility that exclusion zone wasn't big enough, for example.
But it did have an exclusion zone, and Musk gave it, what, 50% odds of making it past the launch tower? Or was 50% a different test launch?
(But this is what I get as an untrained watcher of Scott Manley videos, I'm not a rocket scientist nor a pilot so I assume I only half-understand what he says, and what he says is necessarily a summary or the videos would be x10 longer).
Oceangate also started with unmanned test dives before they declared their submersible to be safe for humans.
It's not directly comparable. Oceangate didn't do that many test dives and never tested their sub to destruction, and SpaceX is working with several government agencies on certifying Starship (both Nasa and FAA). But there are parallels in attitudes that should be drawn and compensated for.
They were reusing a material that is not safe to reuse that way. If they were only testing the design, it's unlikely anyone would be dead.
Either "reusable carbon fiber" is the design, and you need to test what it takes to break that.
Or "single use carbon fiber" is the design, and you need a new hull each trip.
They did neither.
They didn't stress test the reusability before putting people on board, and that's both one of their biggest mistakes and one of their biggest differences from SpaceX.