What is a Sunk Cost?
A sunk cost is money already spent and unrecoverable — and therefore, rationally, irrelevant to any decision about the future. The sunk cost fallacy is continuing a failing endeavor because of what it has already consumed: "we've spent too much to stop." Forward decisions weigh only forward costs against forward benefits.
Every kill-point discussion is a fight with this fallacy, which is precisely why gates compare remaining investment to remaining benefit and ignore the money already gone.
Worked example
$8M into a $12M CRM implementation, a superior SaaS product launches at $1M/year. Finishing costs $4M more for a worse outcome; the $8M is gone either way. The steering committee that switches is making the rational call; the one that "protects the investment" spends $4M to avoid admitting the $8M — buying embarrassment insurance with shareholder money.