People are stupid and can't manage their expectations. You often see developers show tech demo and game play trailer behind close door because the general public aren't informed enough to make proper evaluation of what the final product will turn out to be. But, I would say that large majority would rather know that a game is in development. All the buzz at E3 is created from the unknown. A great game is a great game and it doesn't matter when it is announce.
The biggest problem is that you have bad games that create buzz and excitement and are hyped to be better then what it eventually delivers. It is a balance acts that can have good marketing benefits if done right. It's hard to manage expectation, the best example is No man's sky, they made many promises and were too ambitious when compare to what they manage to delivers.
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