Generally speaking, if we release updates, then that's the thing we want people to judge the game by. It takes me several hours to do a new installer build. Having to do that, and/or maintain a separate update tree for the demo, doesn't seem like a good investment of time; particularly because our evidence is that most gamers ignore our demos in the first place. I've always been a big fan of demos, but when looking at things like the Steam numbers the vast majority of people buy our game without trying the demo on Steam (and it's hard to believe they're going somewhere else to get the demo in most cases, you know?).
As you say, given that there are illegal copies within a few days anyhow, if anyone is super on the fence I guess that's one option. I don't condone piracy, but there are people who have stated they ignored our demos anyhow and pirated it to see the "full version." Expecting that it was a more hamstrung demo than we actually have, I guess.
If there turned out to be some overwhelming demand for a demo then that would be a different situation, but as it is our data -- and that of other indies that we've spoken to on this issue -- doesn't really support that position. To my surprise, really. I've resisted doing anything but the CD key + demo route for a long time, and Shattered Haven is kind of our trial of how things would work if we go to just the "straight no drm plus no demo" route. If that goes well, then the expectation is that we'll be doing something similar with future titles. If not, then we'll adjust accordingly, possibly going back to the license key model. New expansions for existing games that we have that use the license key model (aka, everything prior to Shattered Haven) will continue to work via the same mechanisms they always have.