I think they're still confused. They think the 'smaller team' was what made Crackdown better, and in reality was 'better team'. Size wasn't relevant, only the people were. They admit later they had people who enjoyed making a great game, and others who relished the politics. The latter is what destroyed them.
The story will resonate with anyone who is familiar with "The Mythical Man-Month", but what I particularly interesting about this story is the stark contrast between the company's initial success with Crackdown and then how quickly it screwed it all up with APB.
Off-topic but important to note: Dundee is not a "small Scottish town" but is a medium-sized city in the UK, the fourth-largest in Scotland:<p><a href="http://en.wikipedia.org/wiki/Dundee" rel="nofollow">http://en.wikipedia.org/wiki/Dundee</a>