I think many companies built around one successful product will hit that point in their lifecycle... where putting more work into perfecting and improving the product provides diminishing returns, but there is a solid demand for the current version of the product.
At that point, it is absolutely the best thing to get rid of everyone and just keep selling the product you have. Too often a company tries to hold on to long, adding new features that don't actually improve anything.
I wish more companies were willing to admit when they reached that point.
A lot of companies try to pivot using the core product as income to find the next big win, with varying levels of success.
But, yes your right at some point you have to admit your product is mature, and cut the engineering effort on that product, hopefully before you start driving customers away.
At that point, it is absolutely the best thing to get rid of everyone and just keep selling the product you have. Too often a company tries to hold on to long, adding new features that don't actually improve anything.
I wish more companies were willing to admit when they reached that point.