I understand what you're saying and we probably could have worded it differently, but ultimately we do need another $100k. In fact, we need $500k or the game won't happen. So we're trying to focus the community on working towards those goals with us. After all, they want to play the real game, not just the prototype.
I prefer being honest about what the demo is: it's a great way to interact with the community and a great way to help spur further pledges. Hopefully playing the demo will convince people to up their pledge.