Not really "losing" money, but leaving money on the table. The problem, of course, is that there's lag between "right now" and when new production can come online, and things can change. Plus it's always hard to tell exactly how much demand there really is.
I can't really fault Natalie and Vinnie for waiting so long to expand. Sure, it would've been nice to be able to buy Pliny at the corner bodega for the last 5 years, but it wasn't what they were comfortable with. In the end owners have to strike that balance. I also have a recollection of some specific instance that soured them on having too much debt, but I don't know the details.