On the second point, yes the total number of PhD graduates for a similar time period was 12.000 (official Government numbers) so this was a doubling of PhD's just like that, out of the blue. No wonder it was chaotic. There was also enormous political pressure regarding "the Government is incompetent as it cannot absorb what is basically free EU money". So, ok, they've absorbed it, sort of.
I think you are right. Reading the online articles and official documentation from that period, which is really scarce (there is no such program available on the EU official website, for example, or I wasn't able to find it), it feels like this was a big experiment, the success of which is not mentioned in the news either.
What I could find is that it was part of the Lisbon Strategy [1], also mentioned in the official documents published by the Government. From the linked wikipedia article: "Its aim was to make the EU the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion, by 2010. It was set out by the European Council in Lisbon in March 2000. By 2010, most of its goals were not achieved. It was succeeded by the Europe 2020 strategy."