I suppose it means that money is too free, and I suppose the market will correct that.
You meant it sarcastically but your second point is actually correct. People who invest in startups like this have a fiduciary duty to themselves or their firms to investigate what they're investing in. It's all "buyer beware" so I have no sympathy for those who lost money; you plays the game, you takes your chances. If you win -- with a Facebook, Instagram, Snapchat, etc. -- you win big. If you lose, you lose big. That's how it's supposed to work.
The net results of crap like this is investors (should) become more wary about what they invest in. They should vet companies before they invest and hold its executives to higher standards than this Nardone idiot was held. All of that is a Good Thing no matter what angle you look at this debacle from.