So, as I understand it, all this money is to work on an open source project, which is quite different than a startup. Now a well-done open source project inevitably leads to a company (Wordpress, MySQL, etc.) but that isn't what they said they were going to do with the money. (Somebody has to host all these nodes for joe-everybody.)

Are there contractual obligations of raising money with Kickstarter, or can they use this for legal fees?

If they can't use the money for a startup, I doubt they'd have trouble raising money for a company separately, though investors know that any software product developed will be open source.