Having said that, I agree with your final point. If you view the whole thing as a setup to extract maximum value via an acquisition, it might make sense. They may have been worth more as a MS acquisition target selling Windows phones than they would have been had they gone down the Android path.
It's entirely possible that neither path would have led to sustainability as a standalone entity.
The specs could be weak, as long as it would be easy, durable and fast for regular users.
Nokia 3310 was phone for regular users. Phone that could drop, had few games, allowed you to download some ringtones. Strong battery, good screen, water/shock proof. Put 8GB memory plus one SD slot, some ok-ish processor and 2GB ram (so it wont age after 1 year) + make put really good battery. No ridiculous screen resolutions, fingerprint readers etc - just durable smartphone for regular user.
With specs like that they might break even - but for sure they would steal european and growing APAC regions easy. Once they would get back they would release business versions that would help them to correct their profitability. Its not difficult for such a strong brand like Nokia. I was amazed how Scandinavian way of thinking (simplicity) vanished from the company.
If Nokia could deliver mentioned phone - I would use it for sure.