Basically this. They may have expected it to increase the viability of some lesser used Pokemon, which it did, while increasing variety in VGC, which it didn't. It's a neat concept, but figuring out how to salvage it would probably take a ton of work. In the mean time, you'll see tons of people wishing they do more with it, even though doubling down probably won't fix things as much, since the major flaw, imo, is how mandatory Mega Evolution is in both team building and battling.
Z-Moves, on the other hand, do actually seem to be a lot more successful at what they want. Sure there probably isn't as much design space for exclusive ones, and they still do feel a bit mandatory for team building... but at the same time they also don't feel mandatory to use in every match. The do add in a bit more choice without feeling like they centralize the meta around them. And to be honest, that is why I would be more happy to see new exclusive Z-Moves over new Megas.
Well, yes Z-Moves accomplish what Game Freak set out to with them (other than trying to develop another cash-cow mechanic), which was to give less used Pokemon a possible use. However, the unintended side effects of going with the Z system are pretty severe.
The biggest difference between Z-Moves and Megas (other than one is a temporary evolution, and one is a single use move), is the complexity. Megas are not very hard to use, you slap on the matching crystal, hit evolve button, and out pops an epic-er looking Pokemon. Z-Moves, on the other hand, take a lot more skill to master unless you're just using them as nukes (as I'm sure 99% of casual players use them), because there's a whole list of effects that can take place depending on which move you use with the Z-Crystal.
Here in lies the problem. Casual players don't know/want to know the in-depth effects of what they use to battle, they're playing the game for the catharsis of completing the game/post-game, not the meta battling. So while it takes a long time to learn what each and every Z-Move does (something I'm pretty sure most people don't even know completely), megas just require you to know cool Pokemon -> Mega cool Pokemon with more stats/different ability. Megas have a much clearer effect for the average player than Z-Moves.
Moreover, Megas are just not as boring as Z-Moves. You can go into your Mega fast, and while its the same process every time, you aren't stuck watching a long cutscene. Z-Moves however, have a fairly lengthy cutscene, that looks cool, but after getting watching it for the 30th time, it feels more like a chore than a fun battle mechanic.
As a result, we've been seeing a large decrease in active players within the Pokemon community. Of course, this is compounded with all the problems of the Alola region (most notably the change from the PSS to the Festival Plaza, gtfo the moron who thought that was a good idea), but it's still a significant problem beacuse it's such a hyped mechanic. Casual players simply do not want to play through Sun and Moon or continue playing it, because while it's fun initially, it gets boring fast. I have a handful of friends, of whom all have played from Gen 3 and up, and literally I am the only one playing at this point only beacuse I'm in the competitive scene. Most of them didn't even get off the first island before they stopped playing.
Z-Moves aren't bad, but they're geared towards competitive play, not casual play. As a result, they only hurt the franchise by turning off new and casual players. Pokemon isn't defined by the meta, and how 'different' and 'variable' the meta is, it's ultimately defined by all the people who play it. If most of the people who play it aren't returning/continuing to play your game, you've done something wrong.
Of course, Game Freak has made some bad choices with the Megas that hurt the meta. Mega Metagross is pretty hard to counter in the meta, and Mega Garchomp is completely redundant. But, Megas have had some success stories to. Beedrill went from being a pretty mediocre Pokemon, to an OU Behemoth. Banette turned into a decent mon with a massive Attack and access to Prankster, one of the best abilities in the game. Glaile took the spotlight with Refrigerate, and became one of the most fun grenades I used in ORAS, even when I lost. As long as Game Freak chooses the right Pokemon to Mega, then they'll work fine. They don't need to redefine the Meta, they just need to be fun to use.