The fact there wasn't a good Karlach ending tied to the Upper City found in the files isn't necessarily grim. Maybe one was intended but it didn't make it into the game's files before the Upper City was cut. Maybe one was still in production and the last minute rewrite forced them to shelve it for the time being. Maybe they simply ran out of time before release so they just released what they had knowing they would have unlimited time and money to fix it after the game was released. Maybe one wasn't intended until everyone hated the endings we got. There's lots of explanations that aren't "the devs hate Karlach".
I'm pretty sure, that lack of time before the release is the main reason why we're all here. You can feel it everywhere in act3. Missing possibility to fix her is definitely somehow connected to upper city, where her quest should be finished. Also for example her cutscene with her smithy friend in lower city (I cannot remember the name). This cutscene is very nice and quite long, inviting tav and Karlach for dinner and then nothing. Don't tell me they put an effort and money into this just to lead to nowhere. And we speak only about missing Karlachs's content here...
