Back in the day, when PC games moved more and more towards multiplayer games and had a need to balance games. Because of how many people were required to beta test these games, this meant that more and more people were getting access to early builds of games. An (unfortunate) problem occured, and many people were starting to review/judge games based on their betas and word of mouth (positive and negative) would spread about games. It soon became very important to push off beta tests until games were closer and closer to being completely polished which resulted in the beta test being less valueable to the company because less content could be changed before releasing the game.
With the exception of massively multiplayer closed-betas, most beta tests are really not that far removed from the game that will be released and are only used to tweek small values and minor gameplay elements. As a result they're not quite demos but they are not that far from them either.
