Yup. As Patrick said, games get cancelled all the time, the difference is that we now get to see that first-hand because of Kickstarter (and to a lesser extent Early Access). The normal model is for devs to announce games when they're pretty far in development, and few of those games get cancelled at that point. We normally don't hear about the game that are cancelled, or at least we don't hear about it before after the fact. With Kickstarter people get in on the ground floor, so we'll see a lot more cancellations going forward for a variety of reasons. The fact that a lot of the people who contribute to Kickstarter feel an "ownership" of that project helps to make the reaction even worse when something happens.
If you're cancelling a project you need to at the very least be able to show that you didn't just take the money and run, and you need to be open and transparent about it.
As for consequences, they're severe - Lori and I have gone almost $100K into debt and are not taking a salary until we release the game. So yes, we believe in consequences and dealing with them. But we don't believe in rushing a game.
