In my time working there, I must personally have seen years-worth, probably decades-worth (and, from afar perhaps even centuries-worth) of work simply discarded because it turned out not to be ‘right’ or ‘good’. This was done with very little animosity towards the people who did the work. There was a distinct difference between working on something that turned out bad and had to be discarded (fine – admirable, even) and doing bad work (bad).
I think this highlights two things that many other organisations would do well to learn. First, what you have is what it is, it’s not the effort that was put into it. If it’s not worth keeping, it’s not worth keeping. Second, if you want the best results, you need to give good people the room to start over without feeling like they are failing.