Chances are the shorts got replaced by other shorts. Someone who shorted @20 gets squeezed when it goes up to $100, they're forced to buy, they end up buying from someone else who is shorting @100. That person gets squeezed @300, they're replaced by someone else who sold short @300. That next person isn't going to get squeezed until $600-1000.
Ultimately the big winners are those who bought @10 and sold @300, or those who shorted @300 and cover @10. Everybody in between gets rekt. That's going to include a bunch of retail buyers and a few shorts as well.
That's fine though - there are still a lot of shorts paying a tremendous amount of interest, regardless of where they bought in. The point is that as long as the WSB crew doesn't sell, the shorts will have to cover (or continue paying a ton of interest forever) and the price won't go down (or at least it won't go down and stay there for an extended period).
Problem is that stock prices are set by the marginal buyer - the one that is buying right now. If the WSB crowd (and hangers on) runs out of money, then suddenly the buyers left in the general public might think the stock is worth $10 rather than $300 and adjust their orders accordingly. The result will be no buyers left, plus a lot of retail traders that bought at $250-325 hoping to ride it to the moon and desperate to get out before the price reverses. Shorts cover easily, at whatever price they name, and longs lose their shirt.
I'm hearing borrow fees are at about 80-100% annualized now. That works out to around 0.2-0.3% daily, so carrying a $10K position costs you $20-30/day, a $1M position costs $2-3K, etc. Someone with enough money to stomach that kind of risk can easily afford that.
That works until there aren't any more marginal buyers. Just because some people out there are willing to sell the stock for $10 (which no rational person is when it's trading in the hundreds, by the way... the idea that there are marginal buyers who are somehow willing to vastly underprice their sales relative to the market value isn't a valid one) doesn't matter as long as large swaths of it are held by people who won't sell at that price.
Ultimately the big winners are those who bought @10 and sold @300, or those who shorted @300 and cover @10. Everybody in between gets rekt. That's going to include a bunch of retail buyers and a few shorts as well.