The latter was, I think, a reasonable mistake. Summers and Rubin figured that people, especially financial experts, would know better than to invest in an obvious bubble whose leveraged value exceeded the underlying value many times over. It's a company-ending mistake that causes you to lose all of your money.
Except, of course, that the company-ending mistake also takes the rest of the economy with it when it becomes that large. As JP Getty supposedly said, "When you owe the bank $100, it's your problem. When you owe the bank $100m, it's the bank's problem". The same applies to the economy, and the federal government stepped in to protect companies (and the economy as a whole) from the consequences of egregiously, flamingly stupid errors.
Which leaves us trapped between economic libertarians on one side, who chafe at any government regulation, and economic pragmatists on the other, who really hate cutting off their noses to spite their faces by letting too-big-to-fail companies fail and take the rest of the economy down with them. Oh, maybe it reemerges a few years later a little smarter, but meantime a few tens of millions have lost their homes and livelihoods for years.
Rubin and Summers, meanwhile, need to learn that Homo Economicus isn't, and that greed and shortsightedness really do need to be taken into account. Long-term self-interest may in the end benefit both of us, but your short-term self-interest screws me as well as you when foresight fails.