Irving was very much a case of both though. Was he as good as he needed to be? No. But did the organization mishandle his development? Absolutely.
During the last lockout, the organization opted to play a couple of AHL journeymen over what was at the time, their number one goalie prospect in Irving. So instead of getting him warmed up and ready to play, they ensured that he was not only cold, but low in confidence given his once-a-month starts. That's shoddy development plain and simple
Then, in training camp, instead of showing some support and confidence in his abilities, building on what was widely considered to be a promising effort as Kiprusoff's backup in the previous season, his capabilities are repeatedly questioned and culminate in him being waiving where he went unclaimed. Obviously, he was full of confidence after that.
Finally, Kiprusoff's get injured and Irving gets thrown to the wolves after having barely played much at all in the previous year. Moreover, he's now behind a team that's struggled defensively, behind which no goaltender that suited up for them looked above average (and that includes Kiprusoff). After one bad performance, he's blacklisted and written off.
It's absolutely fair to say the organization did a horrible job with Irving's development because it's entirely true. Regardless though, Irving's not exactly old at 25 nor are his opportunities to come back to the NHL finished. He's apparently doing well in Finland so who knows.