Not necessarily [hopefully?]
I think it's a given that Honda came back into F1 under-prepared. Indeed it has been claimed that Honda wanted to re-enter in 2016, not in 2015 as they were forced too, by McLaren's need to find a replacement engine for the Mercedes PU. Thus the task for Honda was compounded dramatically, as while they had a single cylinder test "engine" up and running in 2013, as part of an "after hours" effort, that is a LONG way short of having a whole, integrated PU of F1 complexity. This resulted in them having to rush the finalization of their whole PU [that's Internal Combustion Engine, the Motor Generator Unit - Kinetic, Motor Generator Unit - Heat (exchanger), the Energy Store, the Turbocharger and of course the minor issue of the Control Electronics]. Some of this development needed to be shared with McLaren for the optimization of the installation into the chassis, which added a further degree of complication.
So they had about 12 months to design, optimize and manufacturer all of this hardware/software, but the real sting in the tail is that due to the Token system in F1, they were severely restricted in making any improvements. Add in the almost total lack of in-car testing allowed under the F1 regulations and it isn't really a surprise that it has become a cluster-fuck of the highest order. Now compare this with the other 3 manufacturers having 4 full years of development to hone their designs, before coming under the restriction of the Token system.
It is to Honda's credit, that under the Token system they managed to illicit an almost respectable amount of "power" from their PU by the end of the 2016 season, but they had realized that the design path they had chosen, especially with the recent introduction of Turbulent Jet Ignition, had rendered their design obsolete.
Being Honda, they decided early on in 2016 that rather than to further develop the 2016 motor, by adapting the TJI cylinder head to the that design, they would start from scratch with an all new design that would offer them the greatest chance of actually overtaking the other PU manufacturers. And being Honda, it wasn't just a case of picking the best design early and developing that, but rather it was "lets keep developing new ideas until we have just enough time to build it and put it in the chassis".
So we end up with the current cluster fuck situation. A design that is still very immature, and has lacked any proper development, as it just hasn't spent enough time on the dyno to sort out the primary bugs inherent in any new design of this complexity. So you have a compounding problem, as the lack of reliability means a lack of on-track development time for the software programmers that give the drivers the driveability they so desperately need, and the chassis engineers that need to understand and develop the on-track aero and handling characteristics of the whole.
My understanding from reading various forums and the feedback they generate, is that Honda believe the ICE is fundamentally sound, just lacking development time [both on the reliability and power fronts], that the issue that presented itself on the second day of the 1st Test - the car returning under it's own power to the pits, but with a couple of cylinders "dead" has not re-occurred even though they haven't discovered the root cause, and thus have assumed it was a one off manufacturing fault. The constant interruption of meaningful running at the second test was due to electronic issues, most probably caused by excessive vibration from the PU [but the vibration was not a reliability problem for the PU itself] so there is hope that they can improve the reliability significantly for Melbourne. Perhaps.
Whether the PU will be able to deliver the hoped for power targets, well that question still remains, even for Hasegawa himself!!
So the prospects for this year do seem bleak, as the lack of running has severely restricted McLaren's development of the chassis, but with a quick improvement in reliability and power, the season can be rescued from total disaster. We shall see soon enough.
