No, I think that their use of existing technology is exactly the heart of the issue. They claim to have made a breakthrough in how blood tests are conducted that allows them to run a large set of blood tests on a tiny fingerprick blood sample. An investigative journalist then reported that they're not using this technology at all, and all the tests they sell commercially are regular venous blood draws run through testing machines purchased from other companies.

If Theranos is not using their fingerprick blood testing technology, then they are not using their technology commercially at all. So if this is true, then they're a company that's been in business 11 years, has a massive valuation, and has not developed a commercially viable technology yet. It's as if a web search company like Google had been around 11 years, was worth >$1 billion, and then was found to be exclusively using and rebranding Microsoft's search technology instead. It's a scandal.

Theranos' valuation cannot be sustained anywhere near its current value simply by selling blood tests conducted on equipment manufactured by other firms. Theranos' claim to fame is a breakthrough in fingertip-prick blood testing technology, and they have no way to differentiate themselves in the market without this breakthrough technology - their investment value cannot be sustained simply by reselling technology made by other firms.

Unimportant factor?

A better comparison would be if Uber had claimed they had self-driving car before they'd even entered the market, had started doing rides, and then it turned out Lyft drivers were surreptitiously hidden inside the front of the car and were actually driving instead of the mystical self-driving computer.

That's how it looks at the moment with the way Theranos is behaving.

This is more like if Uber claimed to be using self-driving cars, but actually had a guy sitting in the trunk doing all the driving. Or maybe a chess machine with a person inside it. Sure it works, but it's a little less interesting.

In the beginning, the secret sauce of Uber was still its technology - being able to order a car on your phone, seeing where the nearby drivers are, not having to pull out cash or a credit card at the end. This made the experience much better than ordering a cab.