My guess is the secrecy of the project was the main contributing factor to its failure. There were no vetting on the products, feature, design, development process, technologies, language choice, etc. Too many people read Skunk Works and thought they were Lockheed Martin.

The language choice probably contributed somewhat. Smalltalk used to have problems with source version control and configuration management. It's difficult for multiple people to work on the same codebase. Merging change was difficult as the individual development environments were modified. The rapid prototyping was probably a false lead as it lured decision makers into thinking lower development cost.

By and large when the only thing about the project you can talk about is the language used, it is probably doomed to fail.