Selling the car and cashing in 401K is generating cash flow. The hardware they bought would be around 8k-10k$ expenses (4k-5k$ per person). I don't consider this as a lot. Or is your point that they should have put that money into marketing instead?
Putting money into marketing is a difficult question. I feel like it works if you have apps that are already generating money, so that you can use that revenue stream to fund the marketing for your other apps.
But if you are just starting out, you should try the $0 marketing approach of contacting bloggers in your space (in their case, educational app blogs) to see if they'll review your app.
So is selling a kidney, but that doesn't make it a good idea. The wife had a job and quit. The husband appears to have some IT skills that he could have used to bring cash in on the side while looking for that hit game.
Heck, if they both kept working they could have had someone make these games for them for way less than they loss in money and opportunity costs.