I think what you've described here is development hell.
I see development hell as something where the game actually gets worked on (something that has not always happened with Versus), yet nothing is advancing as they should be (I don't see something like them chancing the overworld-style, which wasn't done because the old style was shit but because they had a change of mind on what they wanted to achieve with the game, and that causing a somewhat big delay as something development hell-y) and what DOES get done is shit, often there are even different teams involved when the publisher tries to get things done after they notice one team is wasting their resources and/or results leave a lot to be desired. A big reason why Versus isn't out yet simply has nothing to do with Versus itself, but bigger problems at Square Enix at large + upper management not giving Versus' development team the kind of support Kitase has gotten with his on-going saga to destroy the FF franchise or the massive team fixing the FFXIV1.0 disaster.
Only point 2, but yeah, that is basically the definition of development hell.
Point 2 isn't development hell. Plans change all the time, this change was done because Nomura seemed to have liked FFXII's approach a lot and decided that he'd like Versus to be closer to that than old school FFs. Long development time itself =! development hell, that's just silly logic.
Point 1 is just stupidity on SE's part (this game doesn't exist beyond this trailer and a rough draft story, but check it out!) and point 3 shows that, for some reason unknown to us, it's apparently a lower priority project than the things staff is being pulled to work on.
Yeah, point 1 was stupid of Square Enix. That was seven years ago, they can't undo their mistake and they've already apologized about it and learned from it (they don't announce games too much in advance nowadays, some games even a lot later than is the norm).
Point 3 is kind of easy to explain. FFXIII did some damage to the FF name, they rushed XIII-2 out real quick in which they tried to address a lot of the complaints that FFXIII got. It kind of left the story in a cliffhanger (why the excecs let Toriyama leave it in a cliffhanger we'll never know), so they'll want to finish the story ASAP.
XIV is basically the successor to what is the most profitable game Square or Enix has ever had, so it's quite clear why they are putting such huge efforts into fixing it. If XIV can be even half as successful as FFXI, then it will have been worth it.
In the meanwhile they'll let Nomura & Co have as much time to make Versus as good as possible so that it's not another XIII or XIV where they'd need years of damage control afterwards.
