Why was Sidney Powell’s defense that she was blatantly lying and that we should never have believed her?

Yes, it would be.

She has tacitly admitted that every lawsuit she filed after the election was frivolous.  And that she should therefore have to pay 100% of all the court fees associated with them.

That, and be disbarred.

She said no reasonable person would believe her but that she still believes that what she said was true.  Sounds odd.

Her argument that no reasonable person would believe her has worked before for Tucker Carlson, so she, like Carlson,  might get away with it in a defamation case.  I doubt she would get away with it in a criminal for something like inciting the riots.  And she will most likely be disbarred for lying.

My take on it is that Trump and his ilk played their supporters for fools and that despite all the evidence, including this admission, is that they are still supporting Trump.

It would be a self indictment. I wonder how she ever got any jobs as a lawyer. 

Hire her for a driving defence: 

'Your Honor, my client could not have been driving erratically and speeding. He was so drunk that he was asleep behind the wheel'. 

because she's a really crappy lawyer. She said only idiots would have believed what she said about the election fraud. 

False, she asked for investigations...