EC hated it and it didn't help that the band was falling apart too but it is the production that's at fault. This from Wiki
Although he hated the record on its initial release, Costello's view on
Goodbye Cruel World has lightened in subsequent decades. Describing it as "the worst record of the best songs that I've written",
[2] he felt the lyrics were stronger than
Punch the Clock, but believed its production led to the songs' lack of success; in the 2004 liner notes, he deemed Nieve's Yamaha DX7 synthesiser as having dated the record's sound more.
[6][5] He also regretted bringing back Langer and Winstanley as producers.
[6] The former even recalled, upon receiving a final copy: "I remember listening to it and saying, 'Oh ****, it's no good.' It's a crap album."
[4] Although their future with the artist had been unclear, particularly following Costello's dismissal of them during the sessions for
King of America (1986), Costello brought the Attractions back for
Blood & Chocolate (1986).
[39] Bruce Thomas later said that
Goodbye Cruel World "would have been a rotten album to end on."