They must be aware that their game is bad and it will bomb hard, so they still release it because the game is nearly completed. They aren't going to cancel or delay the game because it's bad. They need to make profit from it, no matter how bad it is.
In the case of E.T., the game was made in less than 2 months (I think) to meet the holiday season deadline. Lack of tools, lack of time, lack of personnel. Atari games were usually made by 1 person who had to do everything. Did the guy who made thought it was bad? All of the CEO who invested heavily on the game's success didn't care and released it. And the rest is history.
If it's shovelware, they know the game is bad so they just rush it and release it, not showing any concern if the game is good. They just want to make profits and capitalize on a movie release or a famous brand.
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