If you consider Kickstarter projects as startups, then a 10% success rate is ok. Is something like am 80% success rate for kickstarter projects desirable? They probably would have to implement much higher barriers for applicants then.
If you're an angel or VC, the low success rate is countered by the large upside - a Kickstarter has no upside besides the cool t-shirt/game/gadget you were promised. The risk needs to be commensurate with that.
If however the delivery rate is only 1/10 then that game actually costs me $200 (since I probably need to fund 10 games in order to get one I can play).
Therefor if I only want to pay $20 for a game, I shouldn't pay more than $2 for a pre-order.
The result of this is that genuine projects who stand a good chance of delivering have to grossly undercharge for pre-orders which starves them of the level of funding that they actually need.
If its value is around the price you're funding it at or slightly higher, then you should only fund things which have a high chance of success; from a proven team, that has shipped plenty of products before. For instance, a band that you like that's released several albums and is raising money for a new one, a studio that is developing a new game based on an existing engine, and so on.
If it's a riskier campaign, like development of a new hardware product from a new company that has never shipped anything before, or an artist's first album, or some amazing new game with an amazing new engine that has all kinds of really neat features, with a game designer you like but a rookie team, then you should only fund it if it has significantly more value to you than what you are funding. Maybe you just think it's such a good idea, that even trying and failing and learning from that is worth the money you spend. Or maybe you think that it is a game worth $200; it's such a perfect game for you, that you would be willing to shell out $200 for it, or the equivalent, fund 10 such games for $20 and get one working game out of it. Or maybe you're just a big fan of the person you are funding, and don't mind giving them $20 even if you think they might not complete the project.
So yes, you should be aware of the risks when funding something; that's why it's funding, and not buying a completed product. You should decide if what you're going to get is worth the risk. Far too many people seem to see Kickstarter as a pre-order system, where the product is basically ready but they want funding to determine how large to make the first batch and fund just the final manufacture. Maybe people think that because it does act that way for some products; but you really should not expect it to work that way for all products.
If Kickstarter limited themselves to the pre-order model, that would vastly limit the kinds of things it would be good for. You seem to want only pre-orders, not to fund development, so maybe that would work for you. But some people want to be able to fund riskier, more wild ideas, and accept that risk. I think that they should be able to; the only trick is that there seems to be a good deal of confusion on the part of funders as to which projects are which type; people don't seem to be very good at judging the risks involved when funding a project.
Some buyers are also savvier than others, for example is it riskier to fund an indie platformer or an arduino replacement? A HN reader might be able to guess but the general consumer might well have no idea.
There are also other factors, like might this fail because there isn't enough funding? or might this fail because it is just an outright scam?
So basically what we have is information asymmetry which will lead a lot of people to assume some mean level of risk in funding a project so the required value payoff will be higher than something bought off the shelf, what the "value coffecient" will be will take time to discover though.
The point is valid though that for example a game which I would love but would never be funded by a game studio might be worth $200 for me.
"...consumer..."
This is the problem. If people are thinking of themselves as consumers, rather than investors, then yes, you have a problem. This is why Kickstarter changed their rules on physical products, to not allow people to buy multiple quantities of something, in order to discourage people from treating it like a pre-order system.
Yeah, there's a certain amount of information asymmetry. I'm not sure you can ever do away with that, without killing the idea of crowdfunding entirely. If you require legal filings and financial disclosures and the like, all of a sudden you can't do it for small projects, you need to hire lawyers and accountants and things like that.
The best way to solve this is to convince people only to crowdfund people that they really trust. Don't look at an idea and say "hey, that's cool, I'll buy one of those." Look at the creator and say "this person can deliver, I'll give them some money to do so."
It's the same as buying a second hand car. I have no idea how well the last owner really looked after it so I either have to do a lot of due diligence (difficult with a kickstarter) or I have to guess how likely it is to have mechanical problems down the line.
When you preorder you are entitled to demand the product or your money back, but with kickstarter if it fails after a good faith effort you probably have no recourse. With most preorders (not all, but most) the product is near completion when you put in the order, but with kickstarter that product is often little more than plans at the point of pledging. It is similar to a preorder, but the differences matter.
Kickstarter goes out of its way to try to make sure people understand that it is not a preorder service, and many projects include a "risks" section specifically talking about how it could fail.
There would be a clear case for fraud if the people asking for contributions just took the cash and walked. But in the event of a good faith effort that failed, I think the court would find that the contract was probably upheld. The possibility of failure was always there and what was promised was the effort.