There are only bad reasons not to have a good demo
carom.ioDemos can be a useful forcing function. Strategic use with high stakes, when successful, synchronize disparate stakeholders on common ground. It can also pull far features closer, and prioritize blocking bugs.
In general more eyes on a real product are good for the companies making it. There's still the same need as always to triage the input--the easier it is to demo a product, the farther the average demo user is from your ideal user or product vision.
But it's hard to hide things in a real product demo, and that's something companies should embrace! Learn early and often, rather than find out only at the end of a protracted sales process that the buyer and seller weren't on the same page.