As one example, we can look at the forecast Burry is best known for, from The Big Short (and the corollary film depiction), and I found myself identifying much more with Michael Burry's investors than those who praised him at the end of the story. Scion Capital was hemorrhaging its investors' money, and for a nontrivial amount of time even after it became widespread knowledge among the institutional elite, the market failed to crash and vindicate Burry's short. From Burry's perspective, everyone around him thought he was wrong, but this misses a lot of the nuance. His fund's investors weren't necessarily concerned with him being right or wrong per se, they were concerned with the ridiculously inane risk he decided to take with the entirety of the firm's capital. It's great that his bet turned out so well for him, but calling it genius (as many do) is so charitable as to be almost literally incredible. Michael Burry could have easily been right but unlucky, and simply run out of capital before he could make a return on the short. This is why the saying, "The market can stay irrational longer than you can stay solvent" is so important.
Look at this from the perspective of Burry's investors, not the retrospective story of Burry's victory. If you were an investor in a hedge fund, and one day out of the blue the CEO emailed to inform you that the entirety of the fund's capital would be liquified to leverage a single market position, and that you would not be allowed to withdraw any of your capital, would you react with approval, lukewarm disinterest or abject horror? Even if you bought fully into Burry and his strategy, would you have the requisite nerve to be comfortable with such an astronomically risky and contrarian position?
That said, one of the things that impressed me most about Burry is that he could withstand such intense and prolonged pressure from both investors (harassing, suing and ostracizing him) and significant financial loss (albeit ultimately unrealized). It takes incredible fortitude to be able to lose that much capital in the pursuit of a positive return.
People can make correct predictions, but there are tons of nuances around them. You could have predicted the Note 7 disaster, but Samsung's stock is up 27% from its pre-incident price. Maybe you knew about VW's problems years ago. Oh, too bad, their stock is up over 50% since 2011. Oh, you knew about the Toyota mat problems? That entire incident amounted to a nearly invisible blip on the stock price.
Betting nearly a billion dollars of other peoples' money on one single thing is absolutely insane. There are a million ways to be completely right and still lose everything.
Not disagreeing with your points about the million ways you can be right (and be unable to execute on it), though. Just that there are about a billion ways to be wrong, and a lot of those come from not taking a broad enough perspective about the impact. Burry did the research, saw the systemic complexity and dominoes that would fall, which perhaps gave him a little more confidence than a CNBC blowhard just looking at some new high in home buying and calling a market top. But he absolutely could have been wrong if he executed poorly.