Looks to me like there was a disconnect between what marketing wanted and what was delivered. Marketing saw this idea as a bit of fun, something that would create some good press and be playful.

Unfortunately the implementation was terrible, it confused users and lead people trying to seriously use the product to send silly pictures around.

Saying they don't care about the product because of this is silly. So many people use it because it is one of the best email applications around. A botched bit of fun doesn't mean the product is going to shit.