Sounds a little more extreme to me than normal development hell. Usually when I read about development problems it's all about cut levels, a few weapons, a couple player features. Glitches, reworks, lots of late nights and rough plot transitions. Usually not the entire plot and seemingly half the destinations.
Halo 2 had a whole lot of shit and it's one of the big reasons why Bungie had its sights set on freedom, but even that ended in something coherent (even if short, cut down, and left on a cliffhanger). Destiny just seems totally gutted to me.
But it's all just conjecture so I could be full of shit.