I can't follow your reasons saying that a demo can't come out before the betatester are done with it. To me a demo is always a beta test of a small part of the game with manny testers
I have always thought of demos as a way that folks can try out a game before buying it to see if they like it enough to buy it. If I am correct, then it would always be in a company's interest to have a demo bug free because people don't like buying software that is full of bugs. Unless of course it is entomology software.