I think they could have done a few pretty minor things to negate any ill feelings without compromising their ability to sell the product in Japan. No one expected to get LWA1 as a reward, so that part doesn't matter. Having a good artbook and a unique slipcase for the LE would have been fine. Also, they probably should not have promised an audio commentary if they had no plans to record one.
In the end it was all about expectations and I think they failed on that with regards to the rewards. They created expectations which they didn't meet. The short itself is great, so the Kickstarter itself wasn't a waste, but outcome of the extra rewards is definitely somewhat disappointing.