The meaning of flagship phones:
On top of the line phones priced above 500 euros, the buyer wants to have the best possible experience of today, both software and hardware wise.
So when he is planning to spent this kind of money on a phone, he compares the offerings. (and always unbiased in order to help your wallet and mind)
He has 3 ways to go:
Android (which is a very mature OS with more than 10 awesome offerings at around this price),
iOS (a very mature OS with two amazing offerings, in different size to choose from)
and W10m (a beta-feeling OS with two high-speced phones).
Most buyers (well they are biased, but leaving aside the bias) will hold in their hands the above
offerings and "feel" the luxury, the heft, the materials and the looks INSTANTLY.
Phones like the iPhone 6S(+), Galaxy S6(edge), Nexus 6P and even a MotoX 2nd gen just feel every penny worth of their price on your first touch,
drop dead gorgeous devices (at least in my subconscious unbiased mind that's how the materials felt on the first touch)
On the other hand, while I first picked up the 950XL (and then the 950) they felt nothing like 500++ euros in the hand.
Don't get me wrong, the screens were amazing looking, but I just couldn't justify the materials used and the design for that price.
My mind thought instantly that it felt like a 640XL and I tend to agree with it..
Then, when the average Joe "weights" the price in the hand, he will automatically assume that the software experience is also top of the line, just like the million dollar styling and feeling of those devices. (because what the ell? he is paying the price, he want the best of everything!)
Clockwork operation of the OS and of course every app of the universe is just what he expects to get in early 2016, especially for that price.
And in any stretch of the imagination, the W10m experience just don't feel up to par with the other 2 OSs (at least for the time I was writing this).
As soon as Joe, who have spent already 500 euro for his phone, find out the software experience is a hot mess, he will feel:
a) Terrible
b) Like a fool
c) Fooled by the inflated promises of the company
d) 500++ euros poorer
e) not trusting this company and telling everyone he cares about to avoid it in any cost
End of flagship-phone definition.
At the end of the day you have to go to the root of the problem, either you bought those 2 test devices or not.
MS just wants to have as little losses as possible from the mobile department.
And "loyal fans" are the front line men for their BS corporate moves, defending every bad decision they make like it is their company.