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Lit. "then We put good [things] in place of the bad".
I.e., they regarded it as a normal course of events and did not draw any lesson from it.
Cf. {6:42-45}.
They argued that life has its ups and downs and, therefore, they did not perceive adversity as a punishment or prosperity as a test—arguing that the same thing happened to their ancestors.
Allah gives enough rope to the sinful. They grow and multiply, and become scornful. Neither suffering nor affluence teaches them the lessons which they are meant to learn, viz., patience and humility, gratitude and kindness to others. They take adversity and prosperity alike as a matter of chance. "O yes!" they say, "such things have happened in all ages! Our fathers had such experience before us, and our sons will have them after us. Thus goes on the world for all time!" But does it? What about the decree of Allah? They are found napping when Nemesis overtakes them in the midst of their impious tomfoolery!