wow, surprised that this doesn't happen more often...to be honest...
I think it's still possible to fraud people over kickstarter by staying under the radar: ask for little money, and if you receive not much (let's say under 5000? 1000?), no-one will bother to investigate whether your project worked out.
What happened in this case is that was a product that too few of the mostly technical-oriented Kickstarter audience understood was unrealistic.