Not quite - it's saying that a good game with a bad demo will lose sales, a good game with a good demo probably won't make any difference because people will buy a good game anyway, and a bad game is very unlikely to benefit significantly from a demo, even if that demo is great - and a great demo of a bad game is near impossible to pull off.
I'd have to put in some thought, but I'm pretty sure I've played demos where I've enjoyed the demo but decided it wasn't worth spending more money on the game. Given the cost of new games, it's actually pretty easy to see that happening from a demo.
And given the time and money that has to go into making a *good* demo, it makes no commercial sense. To spend that money on a demo you need a concrete business case and
CBA (that's a cost benefit analysis incidentally, whatever the forum software may think
) that says making the demo will long term make you more money than you spend making it. Otherwise, you're just throwing money away.