Yes, I think Ford fumbled this one, although "Crown Victoria" is probably a nameplate that needed to be retired if they wanted anyone under 70 to buy a full size Ford.

The history of the Taurus is pretty sad, with it starting as a genuine leap forward and then being left to languish for years and become a joke; eventually being discontinued for a while. Even when they brought the name back, it was confusing to customers since they were renaming the 500 which had only been out a short time. Now we have another languishing Taurus that might get the axe again; who knows. Bringing in the Fusion and moving the Taurus up to the next size wasn't necessarily a bad idea, but I think it happened haphazardly and still resulted in a neglected Taurus.
Former Ford designer J Mays once said that customers didn't walk away from full size cars, the industry just stopped making interesting ones. To some extent this is still true.