Your thinking is fine except for the fact that you fail to factor in money, both on large and small scale game productions. On large scale games the publishers are pushing the developers to meet a certain date. You have to figure in the time it takes to send a game off to be pressed and printed into the equation on top of strict deadlines from the people that hold your money. When games go “gold” i.e. off to production there is nothing the developer can do to update it past that point (for retail sales at least) and typically have a day one patch to fix looming issues that made it to the final release.
For small scale games you seem to think that the developers have an endless stream of money available to them. There comes a point in time when whatever resources they may have had will dry up, and the easiest way to generate some money for the project is to release it, even if it is not in a finished state. (Hence a good number of alpha funded games.) Most indie games are done by very small groups of people with a very limited pool of resources. Even kickstarted games like Chivalry will run dry of those funds at some point in time and have to start generating new funds when the option is to scrap a project or start selling it incomplete just to keep it afloat.
You’re only looking at this through the consumer’s eyes and not taking into account the business side pressures that all game developers face be it large or small. On top of all that, Chivalry was one of the most playable and polished games out of the gate that I can remember. Sure it had bugs, but code breaks and crap happens. This isn’t exactly programming a simple calculator in your CPSC1000 class in C#.