Schilling's "bad business decisions" basically boil down to being excessively optimistic. He (a guy with no knowledge of the game development process) started a studio and set them working on two massively ambitious titles. Then he bought another company. Then he accepted a $75 million loan from Rhode Island, and moved his company there. Then his game came out and sold around 1.5 million copies. Great, right? Sure, except that the estimates I've seen said he needed to sell approximately twice that to break even. So at that point his company had burned through his money, burned through Rhode Island's money, and didn't have the funds to make it to game #2's release. He had no backup plan and no source of additional capital, so the entire staff of two game studios lost their jobs, Rhode Island got shafted their $75 million, and Schilling himself was, more or less, financially ruined. Or at least hit very hard.

So...yeah. He basically set himself up for failure from the start. In order to succeed, his brand new studio had to hit sales numbers that few companies ever see on their very first title, and had no financial capability to weather average (let alone poor) sales. Don't get me wrong, I'm sure there's more to the story that I don't know, but it certainly looks like he screwed over a lot of people because of unrealistic expectations and poor planning.