I don't think the investors are too stupid. Coming from the UK, we have a far too conservative investing streak. People only want to invest in something that is a "sure thing". We're too cynical.
The investors in Zynga, knew the risks. It's acceptable to invest in 10 failing Zyngas as long as one of them turns into a Google or an Amazon. As long as "sensible" pension funds steer clear, I don't see Zynga failures as a problem.
And you know what? When Zynga fails, the founder will go off and make another company, and another, until he dies in penury or becomes a zillionnaire. That's how Americans do it. And not only him, some of the developers will take the experience on the chin and go off and do their own start ups and it only takes 1% of them to become a global tech giant. This is the game Americans play that we in the UK cannot grasp.
And I envy them. In the UK we have the odd Richard Branson type now and again, but nowhere near enough. I even read an article about Tech City the other day (we love to put them down too), stating the total lack of ambition by most startups to become global names, or to compete on a global scale. Just sums it up really.
When we in the UK can build an Amazon, Apple, Google, Oracle, Microsoft, Yahoo, Facebook (yeah, they make money), Red Hat etc, we can start laughing at the Zyngas of this world.