Well fuck those guys. Id gave away a full one-THIRD of the original Doom, and we all know how successful that was.
Interesting you'd bring that up, because the whole problem of Far Cry 2's demo made me think of Burnout Paradise's demo. The problem you have is that they're both games where it might not make make much sense to have just a small portion of the game available. It will just be crap.
Looking back at Burnout, they'd probably have done better not releasing a demo than the pile of junk they put out there, as it gave people the wrong impression of the final game. So I definitely think this is the "safe" route for the FC2 creators. It would be interesting to see the results if someone decided to give away a huge chunk of their game as a demo again; say one third. I bet it would work a whole lot better than some butchered wreck that barely resembles the full game.