That's nobody's fault but their own. That's one of my primary points about them not really learning a valuable lesson. If they were booked solid by prime conferences at those prices, and people were calling them from all over the country, I'd suggest they were undervaluing their service by at least an order of magnitude.
I believe they should have begun charging sooner and much more than they were, especially if they didn't particularly love the project. When I started hating my previous company and the work I was doing, I doubled my prices. It didn't hurt sales, and I put more money in the bank for my next venture.
I think my intent is being misunderstood quite a bit. I tried to clarify in another response, but it seems like people think this is an either/or thing; that they had to keep working on the label business to be living according to the Gospel of SwellJoe. And, that's not what I mean, at all. I mean that if you're going to build/run a business to bootstrap another business, you should charge enough to make it worth the effort you put into it. They built something that people really wanted, and then grudgingly started charging a tiny bit of money for it (when I'm doing stuff I don't love, I won't even leave the house for less than $500; seriously, when I was doing contract IT work, I billed $125/hour with a four hour minimum), and flipped it for probably much less than they could have.
I'm not suggesting they should have stuck with the label printing business forever, just that they did not capitalize on the label printing business on anywhere near the scale they could have, and probably in the same time period.
It's much different from something like contract IT where nobody knows how to bring the network back up and they can't do any work while it's down.