There's been a lot of assumptions on what might have been the issue with Naughty Dog's game was.
I've seen the game must have been bad in some fashion, or Naughty Dog is too slow to make content for that kind of game.
Based on what the article said, the latter is probably a lot more accurate.
The critical part of a live service title is that people are playing it on some kind of regular fashion. That might mean playing a few hours a month at least for years. By comparison, Naughty Dog has specialized in making fantastic 10-20 hour experiences. They do make good multiplayer, but it's not the core of what they do. But largely they make the anti-live service game. A live service game probably shouldn't even have Naughty Dog's level of polish, it doesn't seem particularly feasible to do so.
If you tried to make like a 12 hour co-op experience as a live service title, that just won't work. Unless Naughty Dog was able to push them out on like a monthly basis or something.
Naughty Dog's game might have been absolutely fantastic, but if it doesn't drive people to play for months on end, then it doesn't fit their goals.