There are reasons for that - mostly related to waiting until they're satisfied themselves with the face - but also because graphical elements seem to be lower down on the foodchain of priorities for them right now.
Even in the March update with footage from mid-February there were still placeholder assets from Shenmue II. That's likely changed by now, though. If they really are gunning for a showing at E3 2017, then I can see them moving more towards final assets. There would have been around a four month gap between when that footage was shot, and E3. Plenty of polish time.
I wouldn't get too concerned anyway. Yu Suzuki agrees that the E3 2015 models weren't right (and probably made very quickly and cheaply for the KS pitch), and he gets final say on whatever goes out in the end.
I wouldn't make this your default mindset without seeing more of the game. Like I've said in a post above, the Japan dinner backers have told us that what they were shown is far more expansive than anything seen on the Kickstarter. And that video was cut in June 2016.
A delay is still probable, but don't underestimate the results of the long and hard hours the devs have already put into the game.
This is true. I know it's kind of a hippie approach to software development, but I think to some degree that passion and love for a project shines through in the final product; and Shenmue III has that in spades.
There are quotes from journalists, Cedric Biscay, Ryan Payton, and even Yu himself about how hard he and the rest of the team are working. When he's not sleeping at the office, he's the first one there and the last one to leave.