Why don't devs for once say, "We have made a piece of crap let's scrap it."

[Gnizmo]

Desroko said:
Because then it's a sunk cost. It's better to release it and get some revenue than to scrap it and bleed money until you're bankrupt.

This is the reason. By the time a developer realizes a game is just going to suck it is too late. The decision becomes how much would it cost to finish versus how much we can make. Essentially the games are shipped hoping to recoup the cost of making and shipping the game itself.