I think the idea behind the SmachZ was sound, but the guys who thought up a mobile Windows x86 gaming device didn't really have an idea of what they would have to do to make it a reality. As a result, like Ian says, I think they bit off more than they could chew. They saw several devices (Tablets, Steam Controller, Nintendo Switch, Tablets with extendable controllers) that had some components they could visualize all being put together into one unit. When the time came for them to shoehorn what they took apart, they realized it wasn't all going to work. Some of their guys who were responsible for product design came up with some ideas of what it should look like, and the rest of the guys spent their time trying to figure out how to make it fit that design, rather than design a shell around what they could actually fit together.
They didn't have all of their components picked out, and were picking out off the shelf components they could conceive be shoehorned into their device without thinking about how it could all fit together.
Then of course, they began dealing with the bad press because they were scrambling to try to make a cohesive product and spent entirely too much time on 'Proof of Concept' before they had anything locked down. Protip guys, get your Proof of Concept together FIRST, either with 3d printed parts, shoehorned components, something semi-functional BEFORE beginning a Kickstarter.
It doesn't help that they've been known to spend the Kickstarted money on frivolous things before they have a viable product as well, and have videos showing them with effectively a second screen shoehorned into a 3d printed case with an umbilical to a gaming laptop. That's not a proof of concept, that's just scheisty.
Now that they've gotten this far into things, it's become a runaway train and the only way they can save themselves is if they either 100% refund their backers or actually knuckle down and produce real, tangible work like ED does with the Pyra, as well as updates to the status fo their production process. Not easy for an amateur operation but their credibility has taken a severe nosedive.