I agree with your assessment... the only group that deserves admonishing are the Nintendo execs who decided to dump a platform they knew they wouldn't be supporting on the market just to recoup some of their losses.
I own a Virtual Boy (I'm a bit of a collector for those earlier days of video gaming) and while awkward to use the three dimensional effect really is quite impressive for the era, held back mostly by the inexpensive red/black color scheme. It was too early to do the Virtual Boy right while keeping it affordable, but the idea itself wasn't at fault. I've long wished to see a Virtual Boy featuring the original specs and hardware that Gunpei had in mind, as I suspect it would be quite impressive... the main was basically batting 1.000 before and after the Virtual Boy across his career, and I've no doubt this one would have been uniquely fun as well.
I don't necessarily think they released it with the intention of not supporting it. They put together a $5 million marketing campaign with NBC and Blockbuster and offered the Virtual Boy system as a $10 rental. They were still announcing games at E3 in '96. And, in late '96 they were still working on developing the Link Cable that would have allowed 2 Virtual Boys to be connected for competitive play. I don't think they threw in the towel on the device until they realized that even the price cut wasn't going to save it. I think if the plan was to dump it on the market just to get back whatever they could on it, they wouldn't have spent any addition $ on it during/after launch.
Incidental side note. I almost bought a Virtual Boy for my brother for his birthday in 1997. I was working my first job, and so I finally had more money to spend on gifts for family than before. I wanted to buy him a new console like my parents always did for us at Christmas time. So, I went to Toys R Us and browsed the gaming section. They had a Virtual Boy on display with "Wario Land" for demo. I tried it out, and I thought it was pretty cool. I was very close to buying it, but something was bothering me. It was the "Discounted to $99" tag on the display. I can't specifically remember if the tag said "Clearance" or not. The Virtual Boy had been discontinued already by that point, but at the time, I didn't know that. But, the tag itself gave me the suspicion that was the case. I didn't want to give my brother something that was exiting the market, so I bought him our first Sony Play Station instead (we already had a Nintendo 64 that our parents gave us for Christmas in '96). Ironically, that Play Station died one day after we set it up. It stopped reading disks mid-game and wouldn't start again. It was the first gaming device anyone in my family ever had to return (ColecoVision, Intellivision, TRS-80 CoCo2, NES, SNES, N64, Gameboy...). But, we went back to the store for a replacement, and that one got some years out of it before it died. Even so, when I saw that the Virtual Boy had in fact been discontinued while we were enjoying games like Vandal Hearts, Suikoden, Final Fantasy VII, Metal Gear Solid, Wild Arms, etc... I knew that I had made the right choice that day.