The whole practice of releasing the game in parts encourages the milking. Smart devs can milk a single "game" for years and years with no end in sight (bigger=better, eh?). And they're using the Patreon as a Netflix type subscription. The best adult games I experienced had been released as full completed games and for free.
To be completely honest, like it or not, money produce quality. Making good, or even better great, games is not an easy nor cheap task. You need a lot of time, knowledge and skill, good idea, means of production (very much pumped up PC or several) and if you go full time, means to sustain yourself. For some projects even more people to speed up or cover skill holes you are not efficient of doing yourself.
We are not talking about games that are being sold or backed up by big publishers. This is underground level where your game will inevitably be played for free so IMHO patreon is great idea for devs to value their effort as any creator would and should to remain active and motivated.
Does it encourages milking? Well, I would say it's incites corruption of those who do stop to value reputation, personal pride and respect of their audience over money gain. So IMHO there is not necessary direct link to milking in patronage idea but there is definitely a rising numbers of those that does so.
Is there a better way (for all sides)? No in my opinion.
If people like the concept, they'll support the development. Updates on the progress is enough, no need to release the unfinished parts unless the game is nearly finished
How exactly would you make them like the concept in the first place if there was no "demo"? By still images? Animations? Text?
People are whimsical. How would you keep your audience sure that you are delivering what you promised, to keep them supporting you?
Also in your logic, GD for example is actually delivering "updates on progress" in his "previews". If a new guy comes around he would assume everything is ok and pledged him support. Now you can just check when the last time game was actually updated instead of falling for false promises.
I believe that there would actually be a huge rise of milking devs if they were ("allowed") just working months (years) on a full game without any playable results in the meantime.
I'd prefer a shorter but consistent game to a bloated confusing mess.
Longetivity is a very subjective factor. You prefer shorter full games? Ok. I like long games with character progression, quality renders, animations (if possible) and superb imagery. There is definitely "market" and good devs for both.
