It's all about risk management. In today's competitive environment, a game company seldom has the luxury of creating a demo. It comes down to this I must assume:
First most AAA titles these days require considerable capital and time investment, but deadlines and release dates are strictly enforced to ensure cash flow can be generated by the company. Today games are also much more complex than games of 10 years ago. This causes many companies to push their development windows up to the very last minute. It takes some seriously skillful project management to keep to the deadlines set by the company, and many developers go over this, as so games are delayed until a further date. With this in mind, games these days do not have the same time to spend on polish as they used to, hence to whole host of games releasing buggy or with day 1 patches.
So if a company now has to release a demo out to the world, they run the risk of their game coming off as buggy, lacking features and more. It's a big financial risk they run, as the demo they release will directly have an impact on the number of game copies sold at launch, and we all saw in a previous article, that the launch period is the most critical for game dev companies.
To manage this risk better, companies will rather turn to their marketing and PR departments to assist in creating awareness and hype for their game. This is why we'll see so many "game play" videos of a game before it gets released. This form of game showcasing is much lower risk, as the developer has full control over what is shown, how polished it looks and comes across. I would assume that it is also less expensive route to go, than taking valuable development time to polish a demo section enough for release.
Obviously there are some exception to this, as I’m sure there are many recent games that have had successful releases and still were able to have demos. But these are few and far between. Most companies will rather manage the risk and rather go with video showcases. Even E3 and other shows are highly staged and prerendered exhibitions of how the game can look, rather than what it actually is.
It’s all in the pursuit of the almighty dollar. Without it, many companies will go under, and many hard-working, talented developers will be out of work.
It is the right way to approach game release? That’s a debate for another thread I feel. All I know is that many companies exploits this to their advantage without any though of the consumer of their products.