Let's go to quanto_the_mad.com, all the information and discussion you need to learn about QTM. There on the home page of QTM is the announcement that QTM is in jail for an indefinite period for some malfeasance. There's a little one paragraph sound bite, a link to "Read the rest of this entry" and a smaller link indicating there are 2 comments. Suppose this was on the front page for three months, and when you first saw it you did indeed "read the rest...". What on earth would motivate you to click on either the read or comments links to find out that QTM was released from jail 3 weeks ago due to a case of mistaken identity. You really don't see how that can be embarrassing?
Not at all, why would it be embarrassing? The report of the arrest would be a factual account, verified by the police. Maybe it would be embarrassing to be arrested, but not to have a site reporting the fact. And that the site didn't update the information later- what site does? Unless they publish the wrong info, there's no reason to update or retract the info.
It's embarrassing for the web site, not you personally. As far as the site not updating the info and "...what site does?" Most, actually. At least pretty much any site that isn't a high school student hobby.
You're getting so enmeshed in the semantic minutia that you're failing to see the far more important aspect: a site dedicated to a particular topic or area of interest looses credibility, trust, and readership, especially among new or first time visitors, if it is not:
has timely, easily found
updated information on topics of particular concern
For an extreme model, look at news sites, or a real estate agency. For a perhaps more germane comparison, look at sites where ad rates and revenue depend on CPMs (google it) and number of unique visitors. If your front page isn't updated with most basic of new developments on a particular topic, and you purport to be a site dedicated to this area of interest, and other sites are scooping you by weeks, that's a bit of an embarrassment. It's pretty close to being flat-out wrong on the topic in question. Kinda like Dewey winning the election (google it, kids). Especially so when you might be trying to negotiate ad rates.
For a specific example, look at: http://www.firsttracksonline.com/
Notice the posting dates of the news articles on the front page. And this is the off-season for skiing in North America and Europe.[Disclaimer: I'm peripherally involved with FirstTracksOnLine, know the web master well, and ski/climb with him regularly.]