There are too many minor players with career aspirations on the line for "losing on purpose" to make any sense. What we're seeing is:

1. No one is "the people in charge." We keep having these stories about how Biden only wants yes-men around, and there's no party mechanism that can force a sitting president to resign or drop out, even in an egregious situation like this. We have an imperial executive who's too senile to be competent, but who can still shout down minions who attempt to steer him.
2. The movers and shakers in the Democratic Party want to win -- hence the panic this morning when Biden’s ineptitude is impossible to keep ignoring -- but are too up their own asses to do a decent job of it. Believing their own bullshit is how they ignored this situation this long in the first place, is how they think you can fight fascism in the voting booth, etc.