Interestingly, Stardock does a slight variation of this. You could pre-order Elemental right when it was announced. You get access to the alphas and betas for the game, and Stardock is the kind of company that actually listens to its fans. The use the pre-order money to help fund development, and you get a game at the end.
But then Stardock does pitch in their own money and isn't entirely dependent on the pre-orders, and their game budgets are usually much much lower than most everyone elses games. They also tend to be extremely open in talking about what they are currently working on, how its working out, etc keeping people in the loop. So it works.
Thats way different from Valve who apparently needs $10-30million up front to get a game going. I'm pretty sure you could combine the dev budgets of every Stardock game and not hit that number.