See, I support small and local artists all the time, whether it's music and merchandise from a band or an affordable piece (usually a 8x10 print or something) from a gallery. The thing is though, I know what I'm getting for my money. The product is done and finished, right in front of me so I know the price is fair for the quality of work.
I read about situations like these all the time on sites like Kickstarter, where people put money in a project in good faith and then get burned. I never liked the idea of Kickstarter when I first heard about it, as I always thought you're somewhat gambling on the word of others. Each time I hear another story just like this, it just reinforces that opinion. Putting myself in the shoes of these customers, I can see why they would get upset. It's good to hear at least some are getting refunds.