This is one of the problems with making decisions based on "data".
Obviously, the benefit of having users is not only in the profit from ads, but rather from having your site be popular, recommended to friends, posted in links in discussions, training Google's algorithms by people clicking on their search results, having people willing to subscribe to future paid services or buy future products, etc.
But since those things aren't measurable in the short term, they get completely discounted by naive businesspeople, with bad results like this.
Obviously, the benefit of having users is not only in the profit from ads, but rather from having your site be popular, recommended to friends, posted in links in discussions, training Google's algorithms by people clicking on their search results, having people willing to subscribe to future paid services or buy future products, etc.
But since those things aren't measurable in the short term, they get completely discounted by naive businesspeople, with bad results like this.