Waste of talent
I wouldn't say so. First of all, it isn't said that these developers (by the way: Singular Crew from Hungaria) could do something else. They are a demo group for the C64, so they probably have a lot of insight into the C64 workings, but that doesn't translate into skills for other purposes. And secondly it probably was a lot of fun doing it, and fun stuff is never a waste.