There are only bad reasons not to have a good demo

In general more eyes on a real product are good for the companies making it. There's still the same need as always to triage the input--the easier it is to demo a product, the farther the average demo user is from your ideal user or product vision.

But it's hard to hide things in a real product demo, and that's something companies should embrace! Learn early and often, rather than find out only at the end of a protracted sales process that the buyer and seller weren't on the same page.