I think the low-priced beta model is a fantastic one for games/game companies that are trying to get themselves off the ground. They get constant user feedback and guidance, and get food on the table (or even rich). In return the players get to give feedback and have it mean something, and get a fun game that gets better over time.

I strongly suspect that if KSP hadn't adopted this model and instead tried to wait until it was done, it would have long since gone the way of vaporware. For an incredibly ambitious game with highly experimental gameplay, in some cases still not fully cemented in place, I think you really need continuous feedback and funding.