OK.
I do *not* think that it's in anyone's interest to create a demo version while the game is still in development/testing. I agree that it's diverting developer and tester resources, and I think that the risks of the demo being buggy or just different to the final product are too high - if something CAN go wrong, it WILL go wrong. I'd prefer the marketing/PR to be via trailers (including pre-recorded gameplay demos made in a controlled environment).
The time to release the demo is when the game has been finalised, after the retail version goes into manufacturing. Close enough to the launch date to discourage most pre-order customers from holding back until the demo (or you don't reveal in advance that you're going to release a demo). By then, you're no longer diverting effort, as the only thing you need to do is cut the game into a smaller version, and, unless you're planning to release a buggy game, you should have removed the risk of a buggy demo. Also, if the demo is from the start of the game, they could carry their savegames forward into the full version after buying.
With that approach, the costs to bring in that group who are unsure become minimal, and I think it becomes justified.
- People who are concerned about marginal or sub-minimal PCs can check it for themselves. Yes, the company would lose sales from those who currently buy and then find it doesn't work for them, but an ethical company shouldn't want to be getting those sales anyway.
- People who genuinely resort to cracked versions because they "want to try first but would be more than happy to pay if they like the game" won't be tempted to just stick with the cracked version. Yes, that's just an excuse for some people who'll go for the cracked version anyway, and yes, some people will decide they DON'T like it after playing, but the existence of the demo won't make things any worse.
- People with limited budgets are probably more likely to be willing to spend their money on a game that they're already confident that they'll like, so if they have a choice between two games, one of which they've only seen in trailers and one that they've already started, they're more likely to pick the safe option - the one they've already tried.
- People are starting to get very cynical about reviews, with good reason. Who better to trust than yourself?