Not everyone magically has money sitting around to load up on a...

Not everyone magically has money sitting around to load up on a stock when it tanks 30%, nor would it be smart to do so during a volatile period of investigations and VGI maintaining their short position. Its a dumb thing to thing and say if you understand market psychology and situations of the average individual. I've seen unjustifiable short positions suppress a stock price over 70% for over a year, only for it to bounce back above baseline in the next six. Doesn't mean anyone wants to or should double down in high risk/volatile periods. Alternatively, another hypothetical the stock could tank to $10 despite false and misleading claims causing the drop, a takeover offer could arise and those that averaged down could get completely rammed from behind, despite being completely right on fundamentals. 

Its about 30 times harder and more complex than you're suggesting. Retail investors have to deal with the variable of time and inconsistent fund availability, VGI do not. Also like the takeover hypothetical offer, they can be absolutely right in their analysis and still get screwed.