In with the current debate, I'm of the opinion that the kickstarter people have the right to spend the 'profits' as they would. In many cases, I would definitely expect the money to be used as 'vacation time' to work on the project, if their financial situation allows it.
There are some on-going 'projects' out there, like DF, that are running solely on donations. So it wouldn't be too far of a difference... Honestly, I don't see any problem with this.
What with many of these developers... well, the better ones anyways, they have the ability to make a game or something of the likes that a backer would want, but is unable to make/get otherwise without funding.
But yea, there are no checks and balances. A failed kickstarter just amounts to a failed investment. You ain't likely to get a red cent back since people asking for money ain't likely to have much to begin with and they've probably spent it all before the investor(you) realize its all going down the flusher.
That is business for ya, even if people decide to invest in stupid ideas or some unreliable person/people. It ain't anyone's problem you put your bet on something that smells bad.
(In an alternate universe, the developer becomes an indentured servant till all debts are paid off.)
(In another alternate universe, the developer gets capped and/or close friends and family are 'convinced' to pay back the investment.)
EDIT: ^ Ethically and Morally Horrible in the standards of modern western society... but, awesome if Kickstarter did do that.