Yes, this was a real tragedy.
The article leaves out a few important details. The boat had two escape hatches, but one was too deep in the water. The other was about 20 feet below the water, but its operation was dangerous, time consuming, and required a lot of effort. As there was no danger of flooding, and plenty of oxygen left in the hull, it was decided that it was safer to simply stay put than to attempt to use the hatch and put the crew out at night on the open ocean. Once it was determined that surface vessels were there to pick them up, two men escaped through this hatch. Another attempt was made with four men in the small space to speed things up, but they drowned inside the escape chamber. The bodies were removed, and two others escaped. But the operation of the inner hatch at the extreme angle of the hull took too much strength, and crew men were unable to get it closed, and water rushed into the boat. This compressed the remaining air, and the sudden increase in pressure and concentration of carbon dioxide very quickly killed the crew, who would have passed out almost instantly. Everyone was dead before the boat flooded enough to break the hawser and slip to the bottom.
The sub actually claimed a 100th life also- Diver Petty Officer Henry Otho Perdue died while working with the salvage crew to raise the sub. He became tangled on the wreck, and when suddenly freed he popped to the surface, and he was killed by ‘the bends’, the rapid expansion of gasses in his bloodstream from the sudden drop in pressure.
As for cutting into the stern, there were several problems. For starters, it was hard to cut through without special equipment that was not on hand. Secondly, those on the surface did not know the state of the boat: if the air in the stern had been holding back flooding, the boat would have instantly flooded as soon as the first hole let the air escape. Thirdly, there were no carbide saws back then, so the only real option was a cutting torch, and using a cutting torch would have resulted in smoke and poisonous fumes inside the hull, which would have killed the crew.
Marine compressed air salvage was in its infancy then, so no one really knew how to handle the situation. Ernest Cox (salvage expert of Scapa Flow fame) contacted the Admiralty but was put off. He later wrote that had he been brought in with his equipment to assist, he would have taken 20 minutes and drilled a small hole in the stern, fitted a pipe with a check valve, and pumped air into the hull for the crew. 50 PSI air (not enough to harm the crew despite some discomfort) would have been pumped into the boat to slowly push back the water one compartment at a time, until after 5 or 6 hours the boat would have floated again on its own. However, at the time there was not a single compressed air salvage expert in the Royal Navy, let alone present at the site, so all anyone knew to do was put lines on the stern and try and dead lift the boat with tugs. This failed miserably.