Well, sure. If everyone had just followed the RFCs and used “test”, this wouldn't have been a problem, since lots of people didn't,
most of them were going to get broken at sometime (unless someone submitted and got approved an RFC to reserve “dev” like “test”.)
Once the gTLD landgrab was announced, it was too late to push the new RFC approach, and it was likely someone was going to get the gTLD.
Someone who was using it for internal use like Google is probably less disruptive to existing users (even with their HSTS action) than if it had been someone who wanted to sell it for public use, which would have produced real chaos.