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I've got no objection to them making a better game with more money. However, if they claimed they could make a good game with x amount, recieved several times x amount, and now claim that the game they can make with that money isn't good enough, it won't exactly fill their backers with confidence.
It seems like the sensible thing to do would be to tell everyone what they've paid for so far and what specifically they need the money for now.
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If you were a backer you would already have that information. I know exactly what is done, and what is still needed to do.
Edit: Also, the game that they claimed that they could make with x amount was going to be an extremely short flash game. The additional funds made them look to make something far superior to that, and they overshot the mark. They are doing what they can to deliver the best game they can, and are doing it in an open, and honest way, without begging, or going back on any promises besides time frame. What could possibly be bad about that?