It was a good move regardless but don't underestimate the amount of time and money spent.
All of this should have been done a long time ago by the established players in the industry. It sounded crazy to them, but really the cost of experimenting with re-entry should not have been much and AFAIK they never even tried.
And now they're going to have to do that anyway if they want to compete with SpaceX, so what the GP said is true, it's something established players should have done a long time ago, and they're going to be noncompetitive for a period of time as a result.
But it was still an expensive program with Grasshopper test vehicles, lots of failed tests and a reduced capacity on the boosters. "Just a little extra fuel" is a great oversimplification, there's much more than that in doing an atmospheric re-entry.
But a marvelous program it has been and I look forward to seeing their future progress.
But if that $1 billion came from their margins rather than from investment, it means they wouldn't run out of funding unless they ran out of business, which is pretty cool.
"If Rocket is destroyed while operating for any reason, Customer will be required to pay the pro-rated portion of anticipated Rocket lifetime replacement cost, or insurance deductible, whichever is higher."