I consider fleshing out customer requirements part of the engineering process. You cannot expect the customer to properly communicate what they want/need. That doesn't mean Scrum, you have many other tools at your disposal, presenting the customer with scenarios to challenge their requirements, use interactive prototypes or even paper ones. All of them far cheaper than implementing the wrong thing.

I agree about the pitfalls of not seeing something usable until it's very late and how to measure progress. The opposite is also true however, you make some easy non-scalable PoC and it looks like a huge progress when it actually can't or shouldn't be used as a foundation for anything.