I have noticed that lately, many sfms have been imploding, resulting in terrible endings. Is this caused by shitty setups that should never have been hosted in the first place?

After watching a great setup go to shit by D3, I can safely say that is not the primary cause. The primary cause is lack of manners.

When you sign up for a game/ host a game, you are entering an agreement with everyone else involved that you will at least spend some time of each game day contributing. Idgaf if you signed up cuz you love the setup or the rp or whatever, if something comes up that you are not able to devote the appropriate time to the game, you need to be replaced immediately. if you are the host, post that you have to put the game on hold. dont just fucking disappear; some people put a lot of effort into playing the game and you ruin it for them. this should be considered as serious as gamethrowing, and should result in banning from all future games/hosting