Is this an argument against bankruptcy writ-large, then? I mean, you start a business and it crashes and what does the bank have left? Maybe some inventory and assets to liquidate?
That's not how bankruptcy works at all, my dude.
Except their credit score, which will take them decades to rebuild. Do people not realize how important credit scores are in the modern world? This dystopian tool created a few decades ago that determines our financial capabilities and is based on things like, "How much debt are you going into, because going into debt and making regular payments makes your score go up! You're not in debt and just have small regular expenses? Well screw you, your score goes down."?
If you know anyone that's gone through bankruptcy, I highly recommend you chat with them about it if they're willing to talk about it. It's not a fun, easy, fast, or painless process.