Don't know how it is for other fields, but the vast majority of preventable costs for a product in software development(across the board, so video games included) are those that are a direct result of maintenance that is almost always a result of a mismanagement of time and expectations. Crunch only makes this worse, especially in an industry where launch days are so crucial to the adaption of the product. Ship a broken game and see your reputation stained well beyond the point where the issues being criticized are fixed. Bad news spreads faster and sticks longer than good news. No one cares that you patched something that should have been fixed in the first place.
Moral issues aside(destruction of social life and health, the inevitable burnout that comes from frequent overwork, etc), there are very substantial mounds of evidence that point to the issues of 'crunch'. It's almost always bad. Resource management is where the problem lies. People wouldn't have to work 80 hour weeks of grueling technical difficulty if managers were more practiced in meeting deadlines.