On-foot gameplay isn't generally bad for a space sim. If you want to allow the player to move around inside space stations, ground buildings and their own space ship, then you need space legs for that.
If you add space legs, it's also natural to allow the player to disembark and walk around on planetary surfaces. It's not a must, as all you can do on foot, you could also easily do with your SRV. But it does add to the immersion.
It's the FPS part where things start to get sketchy. Because that's where it gets almost impossible to maintain a balance, without killing immersion.
- Gun and suit prices: price them reasonably in relation to ship prices, and even new commanders can buy every gun and suit immediately. If you want to avoid that, you have to put higher price tags on guns and suits than you put on space ships. Which is pretty stupid, if you think about it. Or you hide these elements behind grind barriers, which is even more stupid.
- Integration of FPS combat into the rest of the game: combat takes place in surface areas. In order to avoid things getting out of balance, you have to prevent the player from flying in with their space ship and blast everything to smithereens with their onboard weapons. Which FDev tried, but didn't accomplish entirely - you can still land your ship outside a mission target, deploy your SRV, drive it into the base and use it as a mobile tank.
- VR: if space legs were nothing more than a walking simulator, VR support would be no problem whatsoever. It's the FPS part that won't work in VR. So if you want to add a FPS, you have to get rid of VR support.
- FPS quality: shooters have evolved a lot over the years. Gone are the days of simple shooter mechanics like in Doom, Quake or Duke Nukem. Modern FPS are a lot more complex, with a lot more refined mechanics. So if you want to bolt FPS mechanics on top of Elite Dangerous, you have 2 options: either throw an insane amount of manpower at it, especially if you have no experience in FPS development (and FDev doesn't). Or make the shooter part lackluster, with NPCs acting in predictable patterns, being a challenge only because they a) appear in great numbers and b) are ridiculous bullet sponges.
So here's the dilemma. It takes a lot of manpower to add an FPS part, and no matter what you do, it will always remain a foreign object compared to the rest of the game. And it won't even attract a lot of new players. The Space simmer types will hate and ignore the FPS part. Shooter fans that weren't attracted to Elite so far won't be attracted by Odyssey, either, because let's face it, as a standalone shooter, Odyssey is crap.
So what did you gain? Some old players are happy, I won't ignore that. But others aren't, to a point where they abandon the game. And while you may have attracted new players, most of them will be gone again pretty soon. Because while pre-Odyssey Elite was a game that you could easily play for years, Odyssey most certainly isn't.
And that is exactly what I mean when I speak of bad decision making. FDev decided to sink countless man hours into an extension that was doomed from the moment they decided to work on it. This was not a case of bad luck. This was not a case of "great concept, just a few details went wrong along the way."
This was a predictable disaster. But management suffered from tunnel vision, ignored the obvious pitfalls and forced the development to a point where they had to release a ridiculously unfinished product.
With a fragment of the manpower, they could have ironed out the many flaws from Horizons and before, that still exist in the game. Added new features basing on the existing fundamental game mechanics (that overall work extremely well). Added some meaningful story elements, to increase immersion and make the game feel less barren.
I get it that all that may not have been enough to promote an entire new DLC. But I'm saying for years already that Elite should have been a service game. $5 per month / $50 per year, and you have a steady revenue flow. Of course, that puts you under certain pressure to provide new content at a faster pace than FDev delivered over the last few years. So that approach would only work if you a) have the intention of growing the game, feature-wise and b) have a working plan how to do that. FDev are certainly lacking when it comes to b), and I even start having my doubts about a).
And that's the catch - the ship towards turning Elite into a service game has sailed. Latest with the botched Odyssey release, they lost too much trust from their community for people to still open up their wallets.
TL;DR: bad management decisions led to a predictable disappointment. And while I hate to be a doomsayer - that may have marked the beginning of the end of the franchise. Because I doubt that the people responsible for the bad decision making are truly capable of reflecting on and learning from the Odyssey fallout.