I think movie flops are much more uncommon than failed companies though. Maybe this investment represents a very uncommon level of certainty in the company's success. It could also just be a bad investment, there is always a range.
It still isn't clear to me that if there was a sudden readjustment of these overvalued companies how many companies would really be effected and what it would mean for the sector as a whole. I don't think its defining the whole sector the way it did in 2000. It might mean bad things for VCs in general, but maybe this is the economy working VCs out of the system.