You are correct in that I'm using the term loosely. Blackboard introduced a product which was marginally better (even that is arguable- I didn't use it and I was one of the first people they pitched, to my knowledge, as I was chairing a technology committee at a huge community college with a lot of tech funding just a few miles from their offices) than what we could do with excite/yahoo at the time.
They went public early and were quickly on the ropes trying to make their stuff work. They then turned to intimidation of their competitors by trying to (so I understand, but probably not in an unbiased way) stretch the coverage of their patents rather than giving the teachers the system that they need.
They were(are?) way overvalued and trying to defend their position, not by getting better but by stifling innovation. The one they couldn't intimidate they bought (webCT) to the detriment of us all.
IMHO, what is stupid about what they did was to not innovate once they had the financial advantage after going public. They were the only public player at that time, and raised quite a bit of capital as I recall.