Both are likely true. It's easy to wave it away in hindsight, but there was genuine energy and excitement about the architecture in its early days. And while the first chips were late and on behind-the-cutting-edge processes they were actually very performant (FPU numbers were world-beating, even -- parallel VLIW dispatch really helped here).

Lots of people loved Itanium and wanted to see it succeed. But surely the business folks had their own ideas too.

Yes - VLIW seems to lend itself to computation-heavy code, used to this day in many DSP (and arguably GPU, or at least "influences" many GPU) architectures.