Although this is interesting, I feel like Sergey is glossing over the thing that hurt their reputation the most — the way they handled the negative response to the game. Reading here, you'd think they were sort of oblivious to the negativity, but instead they developed a reputation for being overly defensive. Criticizing the game would reportedly get you banned on The War Z's Steam forum. And when people started calling attention to the inaccurate description, rather than saying, "Oh, shoot, we messed up," Sergey went and did an interview with GameSpy where he basically defended many of the inaccurate statements, said that people "imagined" and "misread" the description, and kept trying to argue with the interviewer over things like whether "up to 50" is the same as "up to 100." Most likely he was just stressed and didn't really know what to say, but it really came across badly.
If they'd responded with the maturity shown in this piece, I think things would have gone very differently for The War Z. The game already had its troubles, but it probably could have gotten past that. But nobody wants to buy a troubled game from a developer with a reputation like that.