to be fair, their competition has well-known financials. The size of the existing market for blood tests is already large; any penetration would give you a sizable business.
"If this company obtains 1% of a $500 billion market, things will be great!" is not due diligence. Here, everything realistically comes down to the technology because the company's ability to gain and sustain market share is almost wholly dependent on it having a superior technology.
Not all VCs are equally (in)competent. I've always felt that one of the root causes of the ~2000 dot-com bubble was a proliferation of incompetent VCs chasing the glut of investment capital. Things seem roughly the same these days, or maybe even worse, since the eventual-rationality of the public markets can't come into play if there's no IPO.
The first VC who backed Theranos is a pretty smart guy. Was first in his class at Stanford, has an otherwise pretty nice portfolio of companies he has funded
My take on this is that theranos started out with good intentions, and just hasn't been able to make it happen so they are trying to buy time. The early stage investments were probably sound, but later rounds are a little questionable. Sometimes you have to know when to fail.
Tech? That's for the nerds. The light is blinking so it's fine I guess