Oh, it wasn’t spent on a beach. They spent the majority of that time working on the combat system, the traversal system, the animation system, the physical level editor, and all sorts of general gameplay engine elements.
What they didn’t spend it on was the story, or even the elements of the engine devoted to delivering the story. Kiril is right, the basic level/story structure was indeed tacked on at the end, after they’d pretty much “finished” (at least in terms of a 1.0 “full release”) the rest of the game. And it shows.
As for the combat… Well… I think that part was just disappointing at a design level. Some of this simply comes down to being built for a mouse; I cannot help but feel the combat engine would have been better if it had been built for a console gamepad instead.
The best thing about Overgrowth was not the game itself, but rather the years of development update videos they released. At least before they neared “full release”, where the dev update videos started getting pretty boring. (It just isn’t that interesting seeing a video that says “We’ve improved frame rates”, without either any technical details or even a side-by-side comparison that shows frame rates have improved. And the story addition videos weren’t that interesting either, they only made it feel even more like they were rushing to get a story into the game before release.)