But if they had nurtured their talent so that they didn't have to re-train testers, programmers and designers every 12 months, they might have finished it in three-quarters of the time.
I'd argue this is not really true. Let's look at two notorious examples of "good" game dev companies, Valve and Blizzard (who I still consider good, even though I don't have any idea what's happening there since they got bought by Vivendi). Both take a lot of time to create games for example Episode 3, Starcraft 2, Diablo 3, TF2.
So you can argue that both methods - being cruel to the employees and being very nurturing - deliver good games but take a lot of time.
Plus nurturing the talent means they can easily roll into the next project with little or no downtime, which makes that project cheaper to complete.