SAN FRANCISCO (MarketWatch) — In the end, the Twinkie had no defense.

The fall of this storied cake truly is an American business tragedy. From junk food to junk finance, another iconic brand has fallen to changing times and economics. Ironically, it’s a company that’s starving to death.

So who killed the Twinkie?

Not surprisingly, blame for the demise of Hostess Brands Inc. has gone around like a bad stomach flu.

Some say it’s the greedy unions, striking and clinging to $10-an-hour wages with benefits. Others blame a series of bad managers and their alleged 300% raises. There are those who point to the owners, Ripplewood Holdings LLC, for creating these unsustainable conditions by piling on $700 million in debt when they bought the company.

Still looking for a bad guy? Try the American consumer whose changing eating habits have gotten healthier. Hostess just wasn’t growing, but its costs were.

The reality is a little less black and white than some trumped-up labor battle or cultural health shift. It’s the story of too many interests trying to milk the dwindling profits of a brand that had it too easy for too long.

Twinkies may survive the apocalypse, but for years Hostess was looking like a zombie.

The company is hurting from self-inflicted economic wounds that had little to do with sales. Hostess, after all, still had $2.5 billion in annual revenue. The company’s woes began really where they should have been fixed: a bankruptcy reorganization in 2004.

Twinkies get a reprieve

Hostess, then known as Interstate Bakeries, spent more than four years consolidating (it closed 54 bakeries and hundreds of stores), selling assets, negotiating with its unions and battling takeover attempts. But instead of emerging cleaned up in 2009, it emerged smaller and burdened. Private equity and hedge funds owned half. Unions took an ownership stake in exchange for concessions.

The biggest problem was a $700 million loan that couldn’t be repaid. Hostess was back in bankruptcy court earlier this year, seeking to reorganize again. But it was a bad situation made worse. The unions, including the Teamsters and bakery workers, felt they had been lied to and misled by new management. Is it the end of the line for Twinkies? (Slideshow)

It got nasty. A court ordered 8% wage cuts and a 17% increase in health-care costs for workers. The unions point to huge management contracts . The CEO is paid $100,000 a month. It’s considered an improvement. The former CEO, Brian Driscoll, was making $1.5 million annually.

New management is led by restructuring whiz Gregory Rayburn. His record outside of Hostess is mixed. He’s worked with companies including WorldCom (sold to Verizon Communications, Muzak (eventually went bankrupt), and Sunterra Corp. which became Diamond Resorts Holdings.

Rayburn thinks the unions are sabotaging Hostess. The unions think Rayburn and his team are looting the company. There’s been disinformation on both sides, but the bottom line is this:

1. The workers will either lose their jobs or agree to massive pay and compensation cuts.

2. The private-equity guys are going to bail out. They may or may not make money.

3. The management guys will collect a check and sell off the assets. They’ve got the least at stake, but they want to get top dollar for the stars in the Hostess franchise.

4. They may be made in China, but as long as there are consumers who will buy them, the cakes will live on.

In that way, Hostess and the Twinkie share a story not unlike Sears, Kodak and Maytag. Culturally their businesses are in shambles with unfulfilled expectations, sullied legacies and broken communities (see Newton, Iowa). If they still exist they are unrecognizable. Yet for the buyers who still believe in a Kodak moment, dependable Maytag appliance or solid Sears tool, the changes aren’t apparent to the naked eye.

Their brands survive and that’s what matters to consumers.

Modern finance is ruthless. Desperate companies sell themselves to Wall Street mercenaries who keep the names alive while extracting what little value is left. If, against the odds, the companies survive, they are leaner and meaner. If they don’t, the truth shows up quickly. Everyone’s piece of the pie has long ago disappeared.

Now, the starving are looking at each other nervously. It isn’t pretty.