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The reveal itself wasn't really a debacle (though certainly a turn-off or a great big 'meh' for a number of people).
Outside of gaming orientated circles, in the general tech/entertainment world, it's probably quite exciting.
The real debacle has been in what followed immediately after the reveal.
We're learning now that different MS reps were saying different things to various journalists.
When said journalists were later comparing notes, they found they had many contradicting statements.
We've also had Microsofts own Vice President saying a number of things which turned out to be somewhat inaccurate and subsequently had to be 'clarified'
That is the real disaster, and certainly not something that's alleviating concern and even suspicion.
We all knew this was a bit of a rush job to counter the PS4 reveal, but some of these very basic and elementary mistakes are, if nothing else, incredibly unprofessional.
It's not like Microsoft is a Mickey Mouse corporation.
Oh yeah, one other note.
That 'new' engine used in Call of Duty: Ghosts?
Yeah, turns out it's not actually new. Just upgraded again, as it is every year.