The cameras could turn out to be pretty bad, or not work at all, and they could decide to can the entire project, then no one would get a camera. It's a possibility on any project of this nature, backers should be ready for it.
However, if they do finish the camera and deliver the 100 or so kickstarter pre orders, then I don't see why they wouldn't keep going.
They're probably not making any profit with the first cameras, but once all the R&D is complete, making more of them is much easier and quicker, and that's what would start creating some profits for them.
I agree 260k is not much for a project and team of this size, but you're assuming that's all they've got. They've said before they have a silent partner/investor, it's not just the two of them running the company. Also, they're working with another company for all the electronics, etc. and it's possible that they're working at a cost or even at a loss in trade for a share of the profits in future sales. These are all common practices in startups such as this one.
Then again, this is all speculation, I have no insider information, and as far as I'm concerned it could turn out to be a success or a failure, no way to tell, but none of it strikes me as grim as many seem to make it.
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