Because in a standard investment there is a potential for a huge upside, the product is a huge success and and you make a bunch of money. Kickstarter the upside is capped at getting your reward.

I've read their FAQ and I won't participate in Kickstarter. I consider it a bad deal. If I see something on Kickstarter I want, I'll wait until it gets retail release and buy it for probably the same amount and have no risk. And if it doesn't get a retail release I'll live without it.