I think what the ICO fever did was that it lowered the barrier to entry to get funding to almost non-existent. At its peak, projects that only have a whitepaper were able to raise 10s or 100s of millions of initial funding. On hindsight it looked silly, but at that point in time many "investors" were blinded by greed.

Naturally with such easy access to funds, most of these "startups" are jokes and are doomed to fail. It is incredible to see how millions of startup funds get squandered over a course of 2-3 years.