Even if it's ready, Kazunori standards are pretty high. He'll only say it's finished when he thinks it is. Plus i don't believe they'll release it before Forza 3.
I think that it is more of a problem of perception from the reviewers rather than the players. How many highly reviewed games never sold well over the past few years? How many games considered mediocre by reviewers over the same time broke records? Game companies insist on basing their product line on the long standing reviewer "pipeline" by seemingly targeting the games towards the reviewers which will get the most press/ad coverage. Not all of them do, and not all of the reviews are wrong, but it is still enough to make it difficult to separate sometimes. I understand why people like E3, but I still say that it is bad for the industry. Time after time we hear about studios struggling to meet the deadline for an E3 demo and how the time spent on that demo (possibly for consecutive E3's also) caused them to push their game back or remove features. Games are getting bad enough with the number of bugs released in the production versions that any distractions just end up hurting the players.
I disagree on you on that. For me that has changed from this edition and next ones. Most games announced / revealed on this E3 haven't got a demo avaiable. Most were shown on videos or just have been revealed without screens. The ones which actually had demos, some were only playable at press conferences. Those Free Disc Demos are long gone from E3. Apart from Uncharted2 beta on PSN, i don't remember other demo/public betas avaiable for the gamers. I do agree on the bugs in final games though. It's happening the same thing when the internet become a commom thing for PC users. Developers release the game not very well tested ( = bugs) and then release patch over patch. These consoles with internet from the start, is making developers lazy and publishers more greedy. Let's not forget that Activision an EA are huge companies now, so they can demand a release date and the developers will have to accept.