You're forgetting that No deal was brandished in the the face of the EU and they simply laughed at it.I, m not disagreeing with this. A no deal would be damaging but to be fair nobody really knows to what extent and the damage card has been over played too many times. Crying wolf and all that.
The big mistake we have made however is letting everyone know we are afraid of a no deal. EU should have thought we wanted no deal and to hell with it. Our own MPs told the whole world we would not accept no deal and then expected May to go and get a better deal...
We have played into their hands. Its like bluffing at poker but telling table we had a pair of 3s..Jack high. Against their full house.
What happened later won't alter that