Well, I think this all comes down to games relying on deceptive marketing and trying to sell people overpriced turds. Increasingly marketing games has been about information control and showing as little of the game as possible and providing a minimum of information. something oft criticized when trailers feature nothing but cinematics, or coming close to release you might have seen less than 15 minutes of what the game is actually like between all of the reveals combined.
Games making a lot of money by being a "leap of faith" investment, if a game sucks, they already have your money, and being a product with a no-returns policy it's quite a racket.
Even when a game doesn't suck, there is always the question as to whether it's going to sustain a user's interest.
I can see how Demos affect this, after all, if the game blows chips people are not going to buy it based on a demo. By the same token if a demo leaves them sated, the game is by definition not going to be lasting enough to have been worth the purchuse. A very good tool for a customer to decide what they want to buy and make an informed purchuse of an expensive item, not so good for a company wanting to move as many units as possible.
In my mind if a Demo cost you business, your game probably wasn't that good to begin with.
I suppose this IS a valid perspective when coming from people speaking within an industry that has so far managed to get by almost entirely with the customer base making leaps of faith. It's just not a very pro-customer one. It simply follows what are very much "duh" sentiments, that the less the customer knows, the better for you as the person selling a product. While Shareware was cool at one time, there is no reason why an industry would WANT to give up the unenviable position of being able to sell customers what amounts to a "mystery box" with only a vague description of what it actually contains, without any expectation of having to reimburse a disappointed customer.
That said, releasing a Demo is usually a good thing, as it shows that the creators have faith in their product as it's definatly not expected nowadays. I've noticed a trend that the less you actually see of the game itself, the more likely it's going to bomb. Ditto for when you see gameplay footage and it's done by someone on the dev team, highlighting only what they want you to see, compared to say footage from slightly more public sources (like inviting Totalbiscuit to play or something).