They put their money (and investors' money) where their mouth was and actually ran a co-op instead of relying heavily on freelancers or cheap outsourced labor. It's unfortunate that doing that hampers sustainability, though.
That all being said, I don't think this is a huge indictment of Cohost—they had a solid 4 years, and in all likelihood they'd have had to close up sooner if their personal financial situations were more precarious. But a situation where making less than $94k is "precarious" is a very tough one to be trying to starta new social media company in.
It turns out that when you actually pay money to people for their work, it is expensive. That is because the value provided by the labor of humans is, in fact, valuable. However, if you instead just exploit people and take advantage of them, lots of things can be really, really cheap. In fact, they can be so cheap it'd be insane not to take advantage of, some might say...