I think it is a more specific thing that just “things get bad.” Lots of tech services start by giving things away, or providing services for cheap/free unsustainably, and then start making unpopular moves when the free money dries up and they have to become profitable.
It is sort of like a subset of anticompetitive behavior (dumping) but done by a small player using investor funds instead of a large company throwing weight around. Or in a field where the “cost” is something nebulous like ads, so it is harder to actually spot.
A weakness of the name is that it invites the broader definition, I think.