To put it in simple terms, all theatrical releases have to make back AT LEAST twice what they cost to make. I say "at least," because most theatrical movies spend a fuckton on advertising, and several of them spend even more on merchandising.
Iron Lung had basically NO advertising, and a negligible amount of merchandising. For a normal movie, that means that nobody goes to see the movie because they've never heard of it, and the movie can't cover any of the lost box office revenue with merch sales (you CAN have a box office bomb recover its budget with merch sales).
A theatrical release earning back its budget and then some on nothing but word of mouth and a loyal, pre-established fanbase is unprecedented. It doesn't happen. Ever.
THAT'S why Hollywood is pissed. Because to executives, a puny internet personality self-funding a passion project with basically no advertising or merch shouldn't happen. To them, it defies all logic. They've been putting billions upon billions of dollars into advertising, merchandising, celebrity casting, huge sets, expensive CGI, and so much more; and then this "nobody" comes along and succeeds with none of that.