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Now Google should have a cemetery full of dead projects by now.
that’s depressing to read. so much interesting stuff. I wonder if there’s an equivalent list of living services
I'm surprised you didn't know this site :) it's pretty much a recurring meme under articles like this.
Why does google not allow "doomed" projects to spin out and try the luck outside the company?
Technically, it wouldn't work at all. All Google projects are deeply tied down to Google's own tech infrastructure. They would need a complete rewrite to function outside.

Legally, it's difficult to ensure the IP is properly handled. I'd go as far as to say it's so difficult it's impossible.

Financially, there's almost no incentive.

Stadia was built on GCP.
GCP + GPT => Stadia 2.0

Beats Microsoft's OpenAI ChatGPT derivative at unit cost and user perception of information supremacy. Google Pixel's voice to text technology is impressive.

What on earth does GPT have to do with this.
Because if you're an executive that signs off on a project spinning out, and that project then becomes wildly successful, you're going to be blamed for letting that super lucrative project "escape".
The sad part is, it was actually quite good.

I used Stadia for more than a year, and very rarely had issues or perceptible input lag even on FPS games, on a middling internet connection. The problem was, everyone knew right from the get-go that Google would shut it down, and it was just a matter of "when". Without any up-front clarity on the refund policy, people like me weren't willing to spend much in their store on anything new; I basically paid for Destiny 2 expansions and that's it, everything else was free games from the monthly subscription.

If they had said from day one that they guaranteed 5 years of lifespan before even thinking of re-evaluating and would refund any purchases in the event they had to cut that short, they would've got much more buy-in.

You were probably very close to a Google datacenter, and had ideal network conditions. I've also seen many reports of high latency and input lag, so this wasn't the case for everyone.

Either that, or you're just not susceptible to lag, or a drop in quality due to compression artifacts.

Google probably had the best game streaming product on the market, but they can't work around physics. There are just too many variables involved that are out of their control in order to offer a consistent experience. When you consider everything that needs to happen between pressing a button to seeing a reaction on-screen, it truly is remarkable they could make the streaming experience enjoyable for many people.

That said, Stadia's technical limitations weren't the only reason it failed. Like you mentioned, it had a confusing business model they never explained well. You could buy games at full price, and stream them for as long as you wanted, which is neither enticing nor sustainable. The Pro subscription plan only had a few games that rotated, when competing plans from PS and Xbox offered much better value. It just didn't make sense.