I believe you are right with starting over. you are beyond paper removal once the paper on the dry wall is gone. Lessons learned. PRIME the walls before you put up wallpaper, even if you think you'll never remove it. Someone will.

You can cover it with 1/4 inch drywall. However, removing it all, might be an option too, then you have the opportunity to check out the wiring inside the walls, and also any plumbing that may be in there, and insulation. Then use regular size sheetrock on the walls, once all old is removed.

Absolutely flawless?: You'll have to skim or 1/4" over everything.

Pretty decent?: Remove the loose paper bits (using sandpaper works), seal with Gardz, mud/sand. Prime/paint.

Go to your local paint store and see if they have a chemical that will dissolve the old paste. There are products made to do just that. Another recommendation is to mix hot water with dish soap and baking soda, possibly even vinegar.

Here is the possible issue: if any wallpaper layer has been painted over, or there is a vinyl layer, and/or there are multiple layers, you're going to have problems with steam penetration. Also, if the walls weren't originally sized you can have problems. Whatever the situation, are you scoring the paper before steaming? This allows the steam to penetrate much better, and get through "sealed" surfaces (like paint). In the past, I've simply gotten out an old hand saw, set all the teeth against the wall, and dragged it down the face of the wall to abrade the wallpaper. If you don't have an old saw, you might try one of these, which people give high marks to:

Paper Tiger

Just had a similar problem....wallpaper was nearly flawless; couldn't even find the seams. Other rooms were not primed for wallpaper and didn't want to chance another mess, like yours We primed with two coats and painted with two coats of paint.Looks great! Used BM products and advice from BM salespeople

NEVER paint over wallpaper!!

You do NOT need to replace that drywall.

I used a steamer to remove the HUGE amount of wallpaper in my house - every bathroom, the entire kitchen and dining room was wallpapered. And it was not a "peel off" either - no primer. I tried the sprays and chemicals and they sucked. The steamer was messy, but man it did the job. Just put down plastic or canvas drop cloths to protect the floors. I got as much glue off as I could and got it as smooth as I could, using a good scraper to remove all the bits. I used joint compound to fill in any holes or gouges. After drying, and then sanding smooth, I used Gardz over the entire wall. This stuff SEALS THE WALL, and it is awesome. You do want to get off as much adhesive as you can, but the Gardz will seal it up so that you can prime and paint.

https://www.thehandymansdaughter.com/repair-torn-drywall-paper-zinsser-gardz/

I feel your pain. Obviously, you will need to re-drywall or hang thin drywall over the damaged board. I have a home with the original wallpaper in the foyer from the 1940s. Metallic chinoiserie in a bronze gold. Plaster walls. I had a professional try to take it off. Nothing worked. He tried everything. The plaster wasn’t primed before the paper was hung. I ended up having him paint over it. When I moved on to other rooms, I feared the same situation…badly prepared walls. Fortunately, it was the only room where it was improperly done. Thank goodness. Good luck!

I saw on one of those home staging shows where they use diluted hair conditioner to get off old wallpaper. They score the old wallpaper first, then soak it with the hair conditioner then scrape off the paper. It works for them; I just don't know to what extent it works. They have just painted over wallpaper before because it was too hard to get off.

When I had enough of removing wallpaper (Iactually ran out of time), I hired simeone.

If hanging drywall on top of wallboard, be mindul of outlets, switches switches, baseboard and window trim