The EVE MT experiment did not just fail because of that, it failed because of a multitude of reasons, most of which a sane person would have seen coming from miles away.
First of all, the NEX Store (the name of this abomination, yes I'm biased against it, deal with it) was released in a vacuum of a completely single player environment. The only place your purchase will be seen in all its glory is in the confines of your own game client in a shabby little hole called the Captain's Quarter (or dismissively, the Captain's Closet). Multiplayer Avatar interaction was indefinitely postponed for now (they finally admitted/realized that they had nothing fun in terms of gameplay value on the drawing board for it, go figure), so the only way your purchase is visible to other players is through the Tiny Avatar portrait (which is one of the reasons why the Monocle was the only item seeing significant sales, the other being trolls buying them to enrage the more easily excited opponents of microtransactions in EVE).
Second, the concept of a market-less (if you ignore the resale), infinite supply item is diametrically opposed to the core concept of EVE's player run economy and sandbox nature. Everything in EVE has a price defined by supply and demand. The price of the Vanity Items is based solely on the current ISK equivalent value of a month's worth of game time.
For a more sane approach on that and how it would be at least somewhat acceptable, I made a thread about that on a community forum in the wake of the ingame riots.
Third, even the low-price tier is still retardedly expensive. Even the cheapest items still cost 1000 AUR which amounts to 1/3 of a PLEX (the Gametime Code token which converts to 3000 AUR, clocking in at around 17 USD from a cheap supplier) and a full set of clothes (boots, pants, shirt/jacket, etc) would set you back over 20 bucks worth of PLEX/Gametime.
The reason given in TFA, while certainly not wrong as it really was bloody stupid to launch with almost exclusively high-tier items, compounds with all this and resulted in a huge backlash against CCP over it (and other poor decisions and a backlog of frustration over the last two years of neglect towards the core gameplay) but was definitely not the only or even the main reason for it.
I should probably also point out that the prices of the items in general are also hugely immersion breaking. The ISK equivalent price of a monocle (the highest priced item) is roughly that of a dreadnought. Which is a capital ship. The second largest and expensive tier of ships (after supercapitals).
And even the cheapest boots cost as much as a battleship.
Admittedly, you apparently buy a lifetime subscription to your clothes as they don't get destroyed upon player death like implants (another decidedly un-EVE feature of the Vanity Items) but that still seems somewhat extreme...