No, they are not dumb at all. That's why they are rebranding "social media" as "metaverse" and trying to own the whole stack (hardware + software) this time around. They are not taking their eye off the prize. The VR tech they build is objectively amazing, and if they continue like this they will own the biggest VR social network, at least initially.

Edit: All I'm saying is that the metaverse is not some new concept. It's bascially social media enabled by the internet, but for some reason we start calling it metaverse when access through the medium of VR.