This is a sad, sad thing for a multitude of reasons. There's a serious illness, a game gets abandoned -- just lots of crap all over the place. My take is that yeah, it's 100% sucktastic that the game won't be 'finished', but I don't begrudge the guy at all for talking away from a mostly thankless, low-income, many hour situation to pursue something more lucrative to help with his wife. More over, I can understand how something like your wife getting cancer can make it hard to focus on work, get things out the door, etc. it's not like developing and launching software is easy ... at all. If it were, everyone would do it.
All said and done, I think it was fine he was thinking about Towns2, probably not the best move to mention it while announcing the death of your first game. Rookie mistake there. From my perspective with the "gamer's have a long memory...", Gamers talk a big game (ha! pun!) but rarely follow through with threats of "never buying from X developer again." If he does decide to do it, people will bring up this situation and make a big fuss about it.
And lots of people will still buy the game. Such is the way of things.
I also don't see this as having a chilling effect -- rather just an educational effect on early access/paid betas, etc. There's nothing wrong with offering that, and crowdsourcing is a great way to give an opportunity to create games that otherwise wouldn't get made. There's always an expectation that the developer will deliver on their promises, and there always should be. But I think gamers need to remember that in situations like this, you are always taking a risk. Always. It's the responsibility of the player to be educated about what you are putting money into.
For myself, I have a checklist of things to have to be in place before I'll 'invest' in a game that's not completed. Are there assets readily available for review? Has work already started on the game? Is the website well done? Is the developer active on blog and social media? Is there a clear path of progression between when I invest and when the game is slated to launch? I've passed on games because as cool as they looked, they didn't meet all of these things, and I passed on them. Other games, Star Citizen, TUG, Landmark -- they met everything I wanted them to, so I invested.
Even then, nothing is guaranteed. A game could meet all my criteria to invest and still fail and never produce the final product. While I be sad? You bet. But I won't be demanding money back because I knew it was a risk. As long as the company made a good-faith effort at completing the game, that's all I'm entitled to as a back/investor/early-accessor.
As for the people with 20+ hours logged into a $10 game demanding your money back - that's just ignorant. You clearly got hours upon hours of enjoyment out of the game. It's just insulting to demand your money back after that.
