Demon's Souls is my favourite of them all, so far, but the game was not super popular vs what the series has become. I imported it, like a lot of people, as it was exclusive in Japan for quite a while with online Japanese servers, then America got it. I think the EU got it about a year later or something with the black phantom edition.
The game was always talked about in small corners, so the idea that Sony fumbled seems a bit disingenuous as I'm sure not many, if anyone, would see the success and status the series has today. Sounds a bit hindsight-y imo.