To try and get back to the topic of funding...
I agree that the mid-market games are in a barren wasteland in terms of funding. AAA titles that get tens of millions of dollars in marketing do well since... well, since they spend tens of millions of dollars marketing it. And free/MTX/$1 games do well, since free things or games that cost less than a Coke are super easy to buy into.
Games that don't have the multi-million dollar budgets but then also have a more niche audience are the areas where finding money is hard. I'm not sure of the exact psychology behind it, but it seems that around $10 and up, people really start engaging in risk avoidance behaviors when buying video games (but will gladly pay $50 for a steak dinner they eat in thirty minutes - go figure).
In terms of Kickstarter, I think the model CAN work really well. If people are engaged and involved, many projects can meet their goals. However, there are three fundamental flaws.
1) Awareness. This is hard, as people can't give money to your game in a 30-45 day time frame if they don't know about it. I'm sure there are many delightful KickStarter adventure games that never even hit my radar and I'm their target demographic - someone who loves the old Sierra heyday titles, specifically the QFG series and who would rather give more money to an indie developer than a publisher monolith. Yet I didn't pledge to them simply because I didn't know they even existed. What helps here is having some big names attached to the project (like Chris Avellone with Pillars of Eternity, or the Coles for the new Quest for Glory game) or having a very easily digested concept (such as a Quest for Glory game where you can be a scoundrel). Anything more esoteric is going to need to engage some more non-traditional means of drumming up attention or look elsewhere for money.
2) Stretch goals. This may seem odd, but it's something I feel is a real problem with Kickstarter. You've done a great rollout, you are making money, the ability to realize your vision is in sight... and suddenly you now have MORE money than you know what to do with! Great problem, right? Except now you have to do more. People expect every cent raised should be used to make the game bigger and badder. I think a much better model would be "X amount of days to reach $Y goal, whichever comes first." Not to mention the extra headaches and cost involved wih extras like "handmade Egyptian cotton mousepads" or "six autographed tea kettles" that are bundled with many KS games. No extra projects, no raising of the bar... it's nice that everyone wants to help make the game better, but it leads to scope creep and the next problem...
3) Cannibalizing sales. Kickstarter turns possible customers into a backer. Which is great - it helps people who want to make a certain game find the money to do so for the very people who want to play it. The problem is that once the release occurs and all the backers get their game and all the random swag associated with it... you've burned through a large chunk of the very people who would want to play it. Which means developers have a (rather slim) paycheck during development, then empty pockets when it's all said and done. Now, I know there are lots of sales after the game is released (well, hopefully) and that the developers aren't destitute after all their efforts (again... hopefully!), but the problem still remains. How much is left of the consumer base when the backers don't need to buy their copies and the vast majority of interaction on the behalf of the developers has been with those same backers? There's not as much buzz generated come release day amongst people who didn't already pay for the game.
This has led me to adopt the following practices as a Kickstarter consumer. I never back something at a higher dollar value that involves a physical extra (although items like in-game items, such as name in the credits or throwaway reference on a tombstone) are safe territory. I never back a project until its last few days. And I never back a project that is on pace to exceed their goal (unless it is the last day and they look like they might need the push), let alone one that is pursuing stretch goals.
If I see a game I like that is going to make it without my help, I follow the release on Kickstarter and then buy it, full price, when it is finally released. I did that with QFI, Wasteland 2 and Pillars of Eternity (I did back the new QFG and Banner Saga, though). I think that is a much more sustainable method of funding, instead of adding 5 new side quests for the extra $50K you raised, you instead get those would-be backers on the hook for new copies when the game comes out, giving you an actual profit and money to fund the next game.
In an unrelated note, I'd love to see a philanthropic group for video game development, where development dollars could be awarded out for those groups trying to make something more than iTunes shovelware but who don't have huge corporate backers to subsidize their costs. It would help bridge the gap between "working for donations/F2P premium models" and AAA gaming, which just seem to be rehashing first person shooter or action games annually with shinier and shiner graphics.