As someone who is investigating starting a kickstarter project, and as someone who has already been burned by venture capitalists in the past, let me say that the general public has no idea what an amazing, game-changing tool kickstarter is. It empowers small developers to be able to choose a path without dealing with backstabbing VCs. The general public can be harsh to deal with, but I would put way more confidence in a random dude in nebraska who donated $10 to a project being a better investor than a venture capitalist.
Seriously, many have no idea how much work dealing with investors is. I will go as far as to say that, in many instances, investors are the reason games ship in poor states.
Kickstarter, Indigogo and Fig (though Fig still needs to fully prove itself as a platform, IMO) have all opened doors to bring back mid-tier budget games through crowdfunding and now personal investment. It is filling in a gap that had been widening between indie games and AAA game development, and this is a good thing overall given the results that a lot of these crowd funding sites has been producing.
Before the Kickstarter boom, we generally had two markets of games. The AAA developer/ retail/ digital market and the indie scene which saw a boom with the App-store initially.
The App store was a major game changer in my opinion. It gave smaller developers a large platform to publish just about anything on with little to no restrictions, which was a big deal back in 2008 . During that time period, digital platforms like Steam were very strict with their submission processes and would be very selective with the software that they would put up on their store front. Same went for PSN and XBLA.
But the "We don't care what you have, we'll take it" attitude of the App-store opened up a huge floodgate for indie developers to drop anything they had in development. This led to a lot of surprise new hits and million seller games that came out of nowhere. Apples earlier
Ipod Touch advertisements from 2008 featured a non stop stream of indie games. They weren't advertising software from major game publishers. There was a huge call to arms from Apple to populate their new App-Store with as much software as possible.
This huge change led other platforms like Steam to open up their storefront with the Steam Green Light program. Sony to take a "Sony loves indie" stance and even affected the Google Play Store as well as many other platforms.
The App Store also gave birth to the Unity Engine, where it started life as a development tool for mobile games on the App Store. But that engine has grown to the point where it is competitive with UE4. Epic had to change their business model for UE4 to compete with Unity. Another major game changer for developers.
But during this indie developer boom there was a gap between indie games and AAA games. Going back to what I said before, crowdfunding has been taking indie development one step further by allowing them to be elevated to mid tier developers. Indie developers with budgets and money.
Pre-2008, indie developers were very limited in their tool sets and platforms. Sure there were mobile phones, but those didn't have the exposure that the smart phones did, or the App-store in particular. For an indie developer back then, your hope was to make a game in flash and upload it to new grounds, mod an existing game as a TC, grab some RPG Maker tool kit (Barkley, Shut Up and Jam: Gaiden) or something simple like Game Maker. Or if you had the skills, make your own game engine, which was very time consuming and led to a lot of unfinished projects that could only survive through being Open Source.
It was very rare to find break out hits during this point in time. One of the few and only real examples that I can think of was Minecraft, which started as a pet project by Notch and they independently started selling it on their own website/ servers.
But generally, it was so much harder to gain a foothold in game development 8 years ago than it is now. These days with the freemium tools, platforms, and funding services and it so much easier to jump into game development than it ever has been before.