It will, metaphorically, if a lack of funding will kill the product (or prevent it from ever being made). Crowdfunding is a financing option, complete with the part where the financiers are exposed to risk.
FWIW I do not participate in kickstarter, but that is because I like having things I spend money on. I know plenty of people who do. So, I think it's in general a good service.
Crowdfunders are exposed to risk, but they aren't going to profit. Real investment comes with the prospect of an actual upside for the investors, but if I can just buy the product later when it actually exists (crowdfunding discounts aside) why not just do that?
It absolutely will.
I have a very close acquaintaince in the process of doing hardware (and I have experience with this myself).
Getting the first production run is brutally difficult, and the operating captiol requirement just doesn't exist.
VC's don't want to pay for it, and neither do business development banks.
Though I think there is a lot of scamming ... 'hardware is hard'. Really hard.
I actually believe a lot of it is 1/2 way - they raise money with good intentions, but then are just stupid and lazy in getting production up, and then can't afford it. Once a team has 1 million - if they get production up, maybe they get 100K in profit. But if they 'fail' to get production up ... they can keep maybe $700 in 'profit' i.e. what they didn't spend on units.
Maybe a better solution would be to have escrow and pay on delivery, with partial payments or something like that.
Maybe you'd agree with that. I just never was a fan of the "oh, it's those people who are doing it wrong" as we ourselves indulge in a different set of the same thing.