I take much of what you say a reasonable wisdom, but the idea of retail investors buying weak stocks on margin and riding them to zero seems far fetched. They shouldn't be buying on margin anyway and if it goes to zero, they're going to get the margin call no matter what.
So they get the margin call partway down, they pay in to keep the stock because they have told all their friends they are long that mess, and out of pride continue to ride it down.
