That's the "sunk cost fallacy"

Conservativism.

"Streisand effect" comes to mind, but like "sunk cost fallacy" it's just an example of something "becoming more popular the more it fails."

"Its Morbin Time" comes to mind

Feels like there ought to be a term... it's kind of a mix between "vicious circle", "feedback loop", and "echo chamber".

There's a certain amount of Gambler's Fallacy in this, too: I'll keep going, because it's going to turn around.

Sunk cost fallacy is probably the most obvious one that springs to mind. Not unlike gambling in a sense, people feel they just need one big payout to win it all back and then some, so they keep betting, hoping that this time things will go in their favour.

Ponzi scheme? Multi-Level Marketing? Pyramid scheme?

Springtime for Hitler. Somewhat fits. It's an intentional failure that succeeded.

Popular boondoggle is a term we used to use at work. I've never herd it used outside that job though.

Sunk cost fallacy?

Quicksand.

I world call that "failing upward" which is fucking up your job such that you get a promotion.

I don't know if the 'wanting is better than having' trope is the best fit but it's a decent fit and kind of caters to the social aspect of what you're describing. You know, some shiny trendy new thing and everyone's chasing after it and as people get it they're sorely disappointed, but it doesn't dissuade others one bit (sometimes the reaction from the initial acquirers causes even more appeal to those who don't have it) , until everyone is all disappointed. And then the moral of the story plays out in the resolution

Perhaps the closest term is "cognitive dissonance." I don't think current usage best fits your description, although the original event that inspired the term certainly does.

https://www.simplypsychology.org/cognitive-dissonance.html

Cognitive dissonance was first investigated by Leon Festinger, arising out of a participant observation study of a cult that believed that the earth was going to be destroyed by a flood, and what happened to its members — particularly the really committed ones who had given up their homes and jobs to work for the cult — when the flood did not happen.

While fringe members were more inclined to recognize that they had made fools of themselves and to “put it down to experience,” committed members were more likely to re-interpret the evidence to show that they were right all along (the earth was not destroyed because of the faithfulness of the cult members).

The term isn't quite as specific as you want, but it sounds like a positive feedback loop? (the linked article even gives ponzi schemes as an example)

I would usually refer to such a thing as a "Producers" (like the play) but that is specifically for bad ideas that suck for a majority of people but benefit a few; like the plot of the play where they make a flop to get more money than they would with a hit.