That doesn't seem to have been the case.

The game seems to have been mostly complete in 2009 when 3D Realms ran out of cash. Gearbox negotiated with Take Two for the assets and worked with Triptych Games, made up of former 3DR employees, to finish it off.

A showreel containing art that appears in the final game was floating around the Internet in 2009, and the finished game contains an internal trailer by Triptych from 2009 which is very similar to the final game.

I really do think the released game is polished up version of the game from 2009. A half-hearted sequel would use more modern technology, and the mishmash of assets does suggest a protracted development cycle.

I suspect what Gearbox was really after was the rights to the Duke Nukem character and getting involved with DNF was just a means to that end. I suspect we'll be seeing another Duke game relatively quickly.

While the game is far from great, I don't think the game is anywhere near as bad as some reviewers would have you believe. It's just dated and disjointed. I suspect some of the overwhelming negativity is due to the continued creep of sensationalism; you simply don't get many hits for calling something a bit crap, only calling it the worst thing ever.

This is not what happened. Please don't spread lies. The single player game is exactly what 3D Realms had developed and Triptych finished following 3DR's demise. Triptych consisted of a bunch of 3DR guys who wouldn't let the game die and spent close to a year working out of someone's house with no compensation. The work done by non-3DR/Triptych people was mainly the multiplayer and the console porting.

I'm not sure how many people expected just plain Daikatana bad.