When you expand on something core to another company's platform, that is sometimes referred to as "picking up pennies in front of a bulldozer."
Sure, they got steamrolled in the end, but it’s an absolute win by any metric.
Not that it takes away from your point, it still sounds like a great success to me.
What they were doing here is usually referred to as sharecropping, because you're building your business on someone else's land/platform. The real owner can kick you out at any time, and you have no recourse.
http://weblog.raganwald.com/2004/11/sharecropping-in-orchard...
When the profit pays back the initial investment quickly, and the risk is that you have negligible losses but stop making more money, that's not a bulldozer.