Well first off, Scott is a sample size of one.
Sorry Scott no offense here. To basically measure the stability of software version based off of Scott's experience in my opinion is limited and would not fully reflect the true conditions of the software. There are things like cabling, signal issues, install conditions that all could effect the perception of a product's stability.
If just having Scott test the product assured them of a stable 721, I think they would have a Beta test team of 1 and I am sure that is not the case. Scotts opinion, though most welcomed, is only one sample of the product and I am sure does not provide a full picture of the product in regards to bugs and stability.
As far as the reliability compared to D*Tivo and other Dual tuner PVRs, I don't know of any studies that have shown this to be the case. There are a number of people that claim this as fact, but at this point it is all based on the experiences people have had on this board. I am not saying it is not true, just that no verification has been done to prove this statement.
Also, my understanding is there is a larger number of Dish PVRs in the market than Tivos? If you look at the traffic on the Dish PVR forum versus the DirectTV there is a lot more traffic. This could be though of as more problems or more people using the devices. My guess is it is a little bit of both. Anyway, that could also lead to the perception that Dish's PVRs are so much buggier than TIVOs. Before the TIVO flames begin, I have not done any comparison myself so I would not be willing to argue either point. It is just an observation on my behalf.
No back to who do you blame, blame goes on to Dish themselves as a company. That includes the person running the Beta and Management. In most companies, the decision to release is not made by engineering. Also some blame could be due to non-responsive Beta testers ( Not you Scott) or the fact that the Beta testers are very experienced so they don't do things the way an average person would. A bad Beta mix can result in these type of issues too. Could be a last minute fix resulted in the problem. It is hard to say since non of us work at Dish, but the blanket Dish Engineer's suck is most likely not correct.