I will wholeheartedly agree that when a business implements a faulty strategy, it should pay the price (even if this equates to failure). For the sake of future confidence in any particular industry; spillover from a few faulty institutions cannot, should not cause responsible firms to fail. No single entity can pose systemic risk -it and of itself-, or else it will have a disastrous impact on long term risk taking (essential in a market system).
Had TARP not been passed, thousands of institutions would have failed (even the ones who "bet correctly" e.g. Goldman Sachs).
Had a proper stimulus been enacted (around $1.5 trillion focused primarily on infrastructure, health and education), current growth outlooks would not be as abysmal.